A small private bank controlled by a reclusive Brazilian billionaire shows up more than two dozen times in US prosecutors’ corruption charges against world soccer officials. It’s hardly the bank’s first brush with scandal.
Delta National Bank & Trust Co. has had at least three previous run-ins with authorities on two continents over the past 15 years, including when Brazilian lawmakers probed its role as the banker for a scandal-tinged head of national soccer. In 2003 Delta pleaded guilty in the US to failing to report transactions linked to a Colombian drug cartel.
Even so, Delta, with US assets of $467 million, continued operations from its offices in Manhattan, Miami and Geneva. Some of that business, US prosecutors alleged last week, included processing millions of dollars in bribe payments from a São Paulo-based sports marketing business to soccer officials affiliated with International Football Federation (Fifa). Delta wasn’t named as a defendant or accused of any wrongdoing in a 47-count indictment released by the Justice Department.
Delta’s US regulator, the Office of Comptroller of the Currency (OCC), is now investigating the bank’s role in those transactions, according to a person with knowledge of the matter who asked not to be named because the probe is ongoing. Linda Chapman, Delta’s vice president in charge of compliance, declined to comment.
The latest scrutiny of Delta comes after more than a decade of red flags about its business, according to a review of lawsuits, regulatory filings and reports documenting government investigations. It isn’t clear how the bank may have changed its reporting or compliance programs over that time, including after the US Justice Department conviction 12 years ago. The OCC imposed no further penalties on the bank, said OCC Spokesman Bryan Hubbard, and allowed it to continue doing business in the US.
Hubbard declined to comment on the OCC’s latest Delta investigation.
“There’s not much of a track record of closing banks down for bad behavior, is there?” said Jack Blum, a former US Senate investigator and expert on money laundering. Delta is “just another bank in this big sea of trouble in the banking business.”
The history of Delta shows that even a small bank can keep operating following a criminal conviction, much as the world’s biggest banks have after agreeing to plead guilty in recent years to charges, including doing business with rogue nations and rigging global interest rates.
At times, the alleged Fifa bribes were channeled from Delta through larger banks, including Citigroup Inc. and JPMorgan Chase and Co., according to Justice Department proceedings announced last week. US prosecutors have said they are investigating banks as part of their probe into corruption at Fifa, the world soccer governing body, but didn’t name any specific lenders.
While banks in the US have an obligation to report suspicious transactions to authorities, the department’s indictment doesn’t say whether any lenders failed to do so.
Citigroup and JPMorgan weren’t the only banks that had relationships with Delta. Over the course of a decade, it wired tens of millions of dollars on behalf of Traffic Group, the Brazilian sports marketer, through those banks and HSBC Holdings Plc., Wells Fargo and Co. and Banco Do Brasil SA, according to Justice Department documents.