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UPDATE 1-Rabobank pleads guilty, agrees to pay $368 mln over processing illicit funds

illicit funds@ (Adds details of guilty plea)

WASHINGTON, Feb 7 (Reuters) - Dutch cooperative bank Rabobank on Wednesday agreed to forfeit over $360 million and pleaded guilty in U.S. federal court over its processing illicit funds and then conspiring to obstruct an examination by its primary regulator, according to the U.S. Department of Justice.

The bank admitted it allowed hundreds of millions of dollars in untraceable cash from Mexico and elsewhere to be deposited into branches in California and transferred without proper notifications to federal regulators, the Justice Department said in a statement.

Rabobank chose to "look the other way" when it learned of transactions indicative of international drug trafficking, organized crime and money laundering, Acting Assistant U.S. Attorney General John Cronan said in a statement.

Bank executives then tried to hide its anti-money laundering program deficiencies during a 2012 examination by the regulator, the U.S. Office of the Comptroller of the Currency (OCC), to avoid sanctions imposed for similar failures in 2006 and 2008, the statement said.

Rabobank's guilty plea took place in U.S. District Court in San Diego. It pleaded guilty to conspiracy to defraud the United States and obstructing an examination by the OCC.

The bank did not immediately respond to requests for comment. In January, it said it had taken a 310 million euro ($373 million) provision in the fourth quarter of 2017 ahead of an expected settlement with the U.S. government. (Reporting by Karen Freifeld, editing by G Crosse and Marguerita Choy)