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* Bank to collectively pay $1.45 bln to US, NY authorities
* US Justice Department defers prosecution for 3 years
* Judge cites bank's cooperation, compliance improvements (Updates with details from the hearing, background on the case)
By Sarah N. Lynch
WASHINGTON, April 3 (Reuters) - A federal judge on Fridayformally approved a settlement between the U.S. government andGerman bank Commerzbank AG to resolve sanctions andanti-money laundering violations.
Commerzbank struck a deferred prosecution deal with theJustice Department in March to settle charges that it illegallymoved funds through the United States for countries like Iranand Sudan. [ID: nL1N0WE1PL]
The bank was also accused of failing to comply withanti-money laundering laws that require banks to detect andreport suspicious activities in connection with a probe intoaccounting scandal at the Japanese company Olympus.
To resolve the case, the bank is required to collectivelypay $1.45 billion in penalties to the Manhattan DistrictAttorney, the New York state Department of Financial Services,the Federal Reserve, Treasury Department, and the U.S.Department of Justice, with U.S. Attorneys' offices in New Yorkand Washington, D.C.
Both U.S. and New York prosecutors agreed to defer thecriminal charges against the bank for three years as long as thelender abides by the terms of the deal.
New York's state banking regulator also required the bank toterminate several employees and hire an independent monitor.
Friday's approval of the Justice Department's deal with thebank by U.S. District Judge Beryl Howell for the District ofColumbia was the last step needed to clear the deal.
At the hearing, the judge said the violations were "veryserious," but that a deferred prosecution deal was warranted dueto the bank's cooperation with the government, its thoroughinternal investigation and its agreement to bolster itscompliance programs.
Commerzbank is one of several large European banks who hasbeen targeted by U.S. authorities in recent years forsanctions-related violations.
Others have included BNP Paribas, Amsterdam-basedING, British banks Standard Chartered Plc,Lloyds TSB Bank Plc, HSBC, Barclays,and Switzerland's Credit Suisse AG.
In this case, U.S. authorities say that Commerzbank concealed more than $250 million it moved through the U.S.financial system, primarily on behalf of Iranian and Sudanesecustomers. (Reporting by Sarah N. Lynch; Editing by Bernard Orr)
