BNP Paribas is set to plead guilty to criminal charges and pay an $8.9 billion penalty to state and federal authorities, according to people briefed on the case. The move would be the culmination of a widespread investigation into the French bank for transferring billions of dollars on behalf of Sudan and other countries blacklisted by the United States.
The plea deal, which authorities hope to announce on Monday, will include a statement of facts that outlines how France's largest bank hid the names of Sudanese clients when processing transactions through its American operations, according to the people briefed on the case who spoke on condition of anonymity. While the bank engineered most of the transfers between 2002 and 2009, the people said, some of the misconduct stretched into 2012, after the government's investigation was already in full swing.
The expected outcome of the case — guilty pleas are rare and the cash penalty is a record, though no BNP employees currently face criminal charges — reflects the breadth and gravity of the suspected wrongdoing. At the time of BNP's money transfers, Sudan was accused of operating a genocidal regime.
In recent weeks, as negotiations heated up and French authorities rushed to BNP's defense, the bank sought to contain the fallout from pleading guilty. The criminal pleas to violations of the federal International Emergency Economic Powers Act and New York State laws against filing false business records could have prompted regulators to revoke the bank's license, the people briefed on the matter said, the Wall Street equivalent of the death penalty.
Benjamin M. Lawsky, New York state's financial regulator, promised not to pull BNP's license but instead took aim at the bank's ability to process payments in dollar denominations, a function known as dollar clearing that is essential to doing business with international clients. Mr. Lawsky's office has reached a tentative deal with BNP that would prevent certain units within the bank's headquarters in Paris, as well as in its offices in Geneva and Singapore, from clearing dollar transactions for at least six months, according to two of the people briefed on the matter. The bank's oil and gas unit, which was involved in many of the illicit transactions at the heart of the case, is among those that face the suspension. BNP's business of processing transactions on behalf of other banks would also face restrictions, one of the people said.
The suspension will most likely be a logistical headache for the bank and undercut its revenue. While BNP could outsource the dollar-clearing business to another bank, doing so would be inconvenient and might cost it some clients.
As of Thursday afternoon, the deal was not yet signed. But barring any last-minute obstacles, the authorities plan to announce the deal at a news conference on Monday.
For prosecutors and regulators, the deal will probably quiet a cross-border dispute with French authorities, who criticized the United States government's demands, including an initial request for a roughly $10 billion penalty. President François Hollande and several French financial officials issued unusually blunt appeals to the United States, though some officials in recent days have softened their tone as the proposed penalty decreased somewhat and the bank gained a semblance of clarity.
Still, the arm-twisting did not seem to have much, if any impact, on the deal, which represents a capstone to the government's crackdown on banks that do business with companies and countries like Sudan and Iran that are subject to United States sanctions. The $8.9 billion penalty — divided among the Justice Department in Washington, the United States attorney's office and the district attorney's office in Manhattan, as well as the Federal Reserve, Treasury Department and Mr. Lawsky's office — is more than triple the amount that six other banks collectively paid to resolve past sanctions cases. Much of the penalty counts as a so-called forfeiture of ill-gotten gains, the people briefed on the matter said, with the rest earmarked as a fine.
The guilty plea also signals a broader shift for prosecutors, who for decades feared that criminal charges would put a bank out of business and destabilize the financial system. The BNP deal comes just six weeks after Credit Suisse pleaded guilty to helping American clients evade taxes, the first conviction of a bank that big in more than two decades and the first sign that banks might not be immune to criminal charges.
Critics of Wall Street have complained that prosecutors apparently decided not to criminally charge any BNP employees, at least for now. Prosecutors have privately noted that BNP was slow to cooperate with the investigation, the people briefed on the matter said, leading to the expiration of a five-year legal deadline for charging individuals.
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Mr. Lawsky, however, has asked the bank to cut ties with about a dozen employees involved, two of the people briefed on the matter said. Those employees include two senior executives.
The investigation into BNP began with a whistle-blower tip to the office of Cyrus R. Vance Jr., the Manhattan district attorney. The Justice Department's criminal division in Washington and the United States attorney's office in Manhattan, along with the F.B.I., also helped lead the case.
As the investigation progressed, the prosecutors homed in on a guilty plea for BNP. To do so, the prosecutors needed the cooperation of the bank's regulators: the Fed and Mr. Lawsky.
The discussions reached a peak in April with a meeting at the Federal Reserve Bank of New York, according to people briefed on the matter. The prosecutors — Preet Bharara, the United States attorney in Manhattan; David O'Neil, then the head of the Justice Department's criminal division in Washington; and Mr. Vance — discussed the importance of the case and the concern that a guilty plea could cost the bank its license to operate. Mr. Lawsky and Thomas Baxter, the general counsel of the New York Fed, signaled that they too wanted to punish the bank without putting it out of business.
Days later, prosecutors informed the bank that they were proceeding with the plans for the guilty plea.