More announcements in a probe of how foreign financial institutions bypass sanctions on countries including Iran could be made by the end of the year, Manhattan District Attorney Cyrus Vance Jr. said.
The announcements will be part of a four-year investigation of “stripping,” in which codes indicating the source of wire transfers are removed, Vance said today in a speech on money laundering in Washington. London-based Lloyds Banking Group Plc (LLOY), Zurich-based Credit Suisse AG, and Barclays Plc (BARC) reached agreements earlier in the investigation into 10 banks that was begun by former District Attorney Robert Morgenthau.
“The foreign banks that were processing these payments for customers in Iran, Sudan, Libya and other rogue nations violated the law, and undermined international security, by enabling their U.S. correspondents to process wire payments that otherwise would have been rejected,” Vance said, according to a transcript of his speech. “They did so systematically, intentionally and as part of their daily business.”
To date, the probe has resulted in the forfeiture of more than $1 billion, Vance said. The actions of the banks deprive U.S. intelligence of information about the people and entities that support rogue regimes, he added.
Lloyds paid more than $350 million in 2009 and admitted to altering wire-transfer information to hide the identity of its clients, according to a settlement with the Manhattan District Attorney and the U.S. Justice Department.
Credit Suisse in 2009 agreed to pay $536 million for making more than $1.6 billion in illegal transactions involving Iran, Sudan, Burma, Cuba and Libya from the mid-1990s through 2006, according to court documents.
Barclays, based in London, entered into a deferred- prosecution agreement in 2010 over how it handled money from countries subject to U.S. economic sanctions and paid $298 million in fines and forfeiture, according to Vance’s office.
Vance said in today’s speech that his office’s probe of Islamic Republic of Iran Shipping Lines found that some U.S. banks have been deceived into executing transactions on behalf of Iranian entities seeking to advance Iran’s nuclear ambitions. The shipping line was charged in June with a scheme to move more than $60 million through at least seven U.S. banks.
The case is People of the State of New York v. Islamic Republic of Iran Shipping Lines, 11-02924, Supreme Court of the State of New York (Manhattan).
To contact the reporter on this story: Tiffany Kary in New York at firstname.lastname@example.org