The sum ordered by U.S. District Judge Jed Rakoff in New York was on top of $16.3 million in forfeitures already obtained by authorities after the federal government accused Wegelin of conspiring to assist U.S. taxpayers hide $1.2 billion in secret Swiss bank accounts. The judge questioned whether the size of the settlement appropriately reflected the extent of wrongdoing that the government alleged.

The bank, which sold off most of its business during the investigation and is now planning to close, pleaded guilty to conspiracy in January.

Rakoff followed prosecutors' recommendations and imposed a $22.05 million fine and ordered $20 million in restitution. He also entered an order finalizing $15.82 million in forfeitures, which he preliminarily approved at the time of the guilty plea.

But while Rakoff approved the settlement deal, he said there was a "funny tension" between the U.S. Justice Department's decision not to seek the maximum $40 million fine and its assertion Wegelin acted with "extreme willfulness."

Rakoff said even including the $16.3 millon the government recovered in April 2012 by seizing money in its U.S. correspondent account, Wegelin will be giving up just 12 percent of the 560 million Swiss francs ($613 million) it earned after it sold most of its assets to Raiffeisen Switzerland last year.

"Not much pain there, is there?" Rakoff said.

Rakoff also sentenced the bank to one month of probation.

Wegelin was indicted in February 2012 after prosecutors said the bank began going after U.S. clients of UBS AG once the Justice Department's probe of that bank became public in 2008. UBS agreed to pay a $780 million fine to end the probe in 2009.

The case is U.S. v. Wegelin & Co, et al, U.S. District Court for the Southern District of New York, 12-cr-00002.