Riggs Bank Anti-Money Laundering Case

As of November 2026: As of November 2026 no later enforcement action or court ruling on Riggs Bank was found, and the bank no longer exists as a separate entity. The 10-Q and PNC release give the sale as completed in May 2005 without a precise closing date in the text reviewed. The Senate report is a minority staff report prepared with the joint work of both parties' staff; its findings are not court judgments, and its figures differ in places from the Justice Department's (for example Pinochet deposits and the number of Equatorial Guinea accounts). The Saudi Arabia accounts were not covered by that report. The full texts of the OCC and FinCEN orders were not reviewed.

Also known as: Riggs Bank Pinochet accounts · Riggs Bank Equatorial Guinea accounts · Riggs Bank embassy banking scandal · Riggs Bank guilty plea.

What happened?

Riggs Bank was a Washington, DC bank with an unusual specialty. According to the Senate report, it served more than 95 percent of the foreign missions and embassies in the capital, and until recently opened embassy banking accounts for any country or person holding diplomatic credentials. It also ran private banking for wealthy clients. Staff found that many embassy accounts worked like personal accounts for senior officials.

Three sets of accounts drew attention:

• Augusto Pinochet, 1994 to 2002. Pinochet led Chile from 1973 to 1990. The Justice Department said he and his wife held multiple accounts, investments and certificates of deposit at Riggs, in the US and at its London branch, and that warrants and a 1998 Spanish order purporting to freeze his assets were outstanding.
• Equatorial Guinea, 1995 or 1996 to 2004. The government, its officials and their families held accounts that by 2003 were Riggs’s largest single relationship, at between $400 and $700 million (Senate staff) or nearly $700 million (DOJ).
• Saudi Arabia. The Senate report counted more than 150 accounts associated with Saudi Arabia but left them to another committee. The OCC listed them among its concerns.

Which techniques did it use?

Riggs was not accused of running a laundering scheme. The record describes a bank that failed to ask questions of politically exposed persons and let their accounts operate in ways that hid ownership and money trails. The findings of the Senate staff and the Justice Department describe these patterns:

• Offshore companies. Riggs helped Pinochet set up two Bahamian companies and opened accounts in their names, which hid his control of the funds. It also helped establish an offshore shell company, Otong, for the president of Equatorial Guinea and companies for his sons.
• Large cash. Between 2000 and 2002 Riggs took nearly $13 million in cash deposits into accounts of the president and his wife (Senate staff), including two deposits of $3 million, with no due diligence on the source. The DOJ counted more than $11 million in currency into the Otong accounts in six transactions.
• Payments to unknown companies. More than $35 million left the Equatorial Guinea oil revenue account by wire to two companies the bank did not know, in jurisdictions with bank secrecy laws. The Justice Department separately described 16 wires of about $26.4 million from June 2000 to December 2003 that Riggs failed to investigate.
• Moving funds against a court order. The DOJ said Pinochet ended a London certificate of deposit early in March 1999 and moved about $1.6 million to the US while an order to freeze his assets was outstanding, and that Riggs delivered $1.9 million in cashier’s checks to him in Chile between August 2000 and January 2003. Senate staff found Riggs also altered the names on his personal accounts.
• A close account manager. Staff found weak oversight let the Equatorial Guinea account manager become closely involved with officials, and wire more than $1 million to an offshore company controlled by his wife. This is the professional enabler risk inside a bank.

These are findings of regulators and Senate staff. No official of Equatorial Guinea was convicted in any record reviewed here.

How was it found?

The OCC’s examiners flagged weaknesses at Riggs from 1997 onward, but the Senate report found that supervisors accepted the bank’s promises to fix them and took no formal action. The pivot came from outside. In November 2002 media stories alleged that an account connected to the Saudi embassy had sent funds that benefited two of the 11 September 2001 hijackers; the Senate report records this as an allegation, and says the FBI was investigating. In January 2003 another press report said Equatorial Guinea’s oil money was being misused. The OCC began a targeted examination in January 2003 that ran more than five months. In March 2003 the Senate subcommittee issued its first subpoena to Riggs.

Senate staff also found that Riggs hid the Pinochet accounts from the OCC for two years and closed them only after a targeted OCC examination in 2002. The Justice Department said Riggs filed no suspicious activity reports on the Pinochet transactions until regulators, the subcommittee or law enforcement found them.

What was the outcome?

• July 2003. The OCC issued its first cease and desist order, to which Riggs consented, requiring it to rebuild its anti-money laundering program. It carried no fine.
• 13 May 2004. The OCC and FinCEN each assessed $25 million, satisfied by one payment. The OCC also issued a consent order on internal controls, including the embassy and international private banking group. FinCEN’s director said the failures were “by no means emblematic of the financial industry as a whole”. The Federal Reserve ordered the holding company to improve oversight the same month.
• 15 July 2004. The Senate subcommittee held its hearing and released the report.
• 27 January 2005. Riggs pleaded guilty to one count under the Bank Secrecy Act. The Justice Department said the $16 million fine was the largest criminal penalty ever imposed on a bank of Riggs’s size, and that the bank had closed its embassy banking and international private banking divisions. The court sentenced it on 29 March 2005, and the five-year probation was set to end when a sale closed.
• May 2005. PNC completed its purchase of Riggs National Corporation, under a merger agreement that had been amended and restated in February 2005.

What were the warning signs?

• No customer risk rating. Senate staff found that Riggs had no system to identify high-risk accounts, could not readily list all of a client’s accounts, and had no policy for foreign political figures. It labelled none of the Equatorial Guinea accounts high risk until October 2003.
• Cash that no one questioned. Deposits of millions in cash, at least one carried in by an account manager, drew no source-of-funds questions for about a year and a half.
• Wires to unknown owners. Large transfers went to companies whose owners the bank did not know and had not asked about.
• Repeat findings. The same weaknesses appeared in examinations and audits from 1997. The OCC later acknowledged “a failure of supervision”.
• A regulator who changed sides. Senate staff found the examiner in charge told staff to keep the Pinochet memo out of the OCC’s electronic files and about a month later accepted a job at Riggs.

What changed afterwards?

Riggs shut its embassy banking and international private banking divisions and stopped existing as an independent bank within months of its plea. The Senate staff recommended that regulators finish overdue customer due diligence rules, add anti-money laundering assessments to annual bank examination reports, and that Congress consider a one-year cooling-off period before a lead examiner can join the bank they oversee. This page does not rely on whether each was later adopted.

The case is also a lesson in supervision. Compare Wachovia, HSBC and TD Bank, and see know your customer and transaction monitoring for what banks are expected to do today.

First published November 7, 2026 · Last updated November 7, 2026 · Legal statuses current as of November 2026