When the California subsidiary of Netherlands-based Rabobank was sentenced earlier this year for conspiring to defraud the United States, the bank was ordered to forfeit $368.7 million — the largest financial penalty ever levied in a federal courtroom in San Diego.

On Wednesday, more than $26 million of those forfeited funds were disbursed to the San Diego and Chula Vista police departments for helping investigate Rabobank, which pleaded guilty to failing to properly investigate or alert regulators to thousands of cash-heavy transactions likely linked to organized crime in Mexico.

In total, the Financial Investigations and Border Crimes Task Force that led the Rabobank investigation received $119 million in the bank’s forfeited funds. The Internal Revenue Service Criminal Investigation unit, which led the task force, gave the San Diego Police Department $20.8 million and the Chula Vista Police Department $5.9 million.

The California Franchise Tax Board also received $20.8 million from the IRS for its role in the investigation.


“These funds will keep San Diego one of the safest large cities in America,” San Diego police Chief Dave Nisleit said after receiving an oversized check at a ceremony outside Chula Vista police headquarters.

“These funds will allow us to purchase equipment, participate in advanced training and keep the department up to date in the latest technology to assist us in both reducing and preventing crime,” Nisleit said.

Chula Vista police Chief Roxana Kennedy, third from right, accepts a check for $5.9 million from the IRS Criminal Investigation unit on Wednesday outside Chula Vista police headquarters. (Courtesy of IRS Criminal Investigation)

Chula Vista police Chief Roxana Kennedy joked at the ceremony that, “normally I’m writing a check to the IRS, instead of receiving a check.”


“For our budget, which is $56 million, to have an additional $5.9 million is huge,” Kennedy said. “The funds will help us acquire the new tools and technology to further our public safety mission.”

Maura Krajewski, assistant special agent in charge of the IRS Criminal Investigation unit, said her agency was grateful to the San Diego and Chula Vista police departments, and the California Franchise Tax Board, for their hard work.

“We are honored that they can put the money to good use for their departments,” Krajewski said in a statement.

The Rabobank investigation and prosecution was unique because of the size of the forfeiture and the brazenness with which bank executives defied federal regulators.


According to the 45-page plea agreement, the bank admitted that not only did it fail to investigate or report hundreds of millions of dollars of suspicious transactions, but it solicited additional business from customers who likely had criminal ties.

In the plea agreement, Rabobank — which federal regulators had previously found lacked oversight of its anti-money-laundering compliance program — did not dispute that the transactions involved criminal activity, including money laundering, bulk cash smuggling and depositing money in increments of just less than $10,000 to avoid mandatory reporting thresholds.

Assistant U.S. Attorney Daniel Silva said no bank officials have gone to prison in the investigation.

“Not yet,” Silva said, though he declined to say whether prosecutions may be forthcoming.


When the U.S. Department of the Treasury’s Office of the Comptroller of the Currency — the primary regulator — tried to investigate the most recent allegations against the bank, several high-level bank executives in 2013 obstructed the probe, provided false and misleading information and fired a colleague who spoke out about the bank’s failings, according to the plea agreement.

Twitter: @Alex_Riggins


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alex.riggins@sduniontribune.com