Riggs Bank (RIGS) pleaded guilty Thursday to a criminal charge of failing to report suspicious transactions in the accounts of foreigners, including two dictators, and agreed to a $16 million proposed fine.

The guilty plea by Riggs throws into question its deal, announced in July, to be acquired for $779 million by regional bank PNC Financial Services Group (PNC) of Pittsburgh.

Shares of parent Riggs National Corp. rose 54 cents, or 2.4 percent, to $22.66 in midday trading on the Nasdaq Stock Market.

The Justice Department (search) has been investigating the bank's handling — at the highest executive levels — of some foreigners' accounts, including those held by Saudi diplomats in Washington, former Chilean dictator Augusto Pinochet (search), and officials of Teodoro Obiang's (search) regime in Equatorial Guinea.

Attorneys representing the bank entered a guilty plea at a hearing before federal judge Ricardo Urbina, who must approve the proposed fine. If he rejects the fine, Riggs and prosecutors may have to renegotiate or take the case to trial.

"The bank regrets what has occurred and has cooperated fully with the investigation," Mark Hulkower, an attorney representing the bank, told the judge.

Riggs, an old-line Washington bank that drew prestige from its near-exclusive franchise on business with the capital's diplomatic community, was fined a record $25 million by a Treasury Department (search) agency last May. The civil fine was for alleged violations of laws to prevent money laundering in its handling of millions of dollars in the accounts controlled by Saudi diplomats and Equatorial Guinea officials. The midsize bank, which has since sold its diplomatic and international businesses, did not admit to or deny wrongdoing in the civil case.

The then-head of the Treasury agency, Comptroller of the Currency (search) John Hawke, had left open the possibility of criminal charges when he testified to a Senate panel in June, accepting blame for failed oversight of Riggs.

Senate investigators revealed details of the bank's questionable dealings: A suitcase stuffed with millions in cash being hauled by a bank officer handling the Equatorial Guinea accounts into Riggs's stately Embassy Row branch. Dummy offshore companies allegedly set up by bank managers for Pinochet, whose name was found to have been altered on some of his accounts to deceive international prosecutors. Payments of $445,800 from a big U.S. oil company into the account of a 14-year-old relative of the president of Equatorial Guinea, earmarked for renting office space.

Under the plea agreement, the bank would serve a five-year probation period during which it would submit anti-money laundering programs for review by government regulators. But the probation would end if Riggs is acquired by PNC.