UK-based bank Lloyds TSB has agreed to pay a 350 million-dollar penalty to settle a probe that it violated US sanctions by allegedly handling illegal transfers for Iran and Sudan over 12 years.
AFP - British-based Lloyds TSB Bank agreed Friday to pay a 350 million dollar penalty to settle a probe that it illegally handled financial transfers for Iran and Sudan in violation of US sanctions.
A Justice Department statement said Lloyd's "has accepted and acknowledged responsibility for its criminal conduct" in a criminal complain filed in US District Court in New York.
"Lloyds agreed to forfeit the funds as part of deferred prosecution agreements with the Department of Justice and the New York County District Attorney's Office," the statement said.
Prosecutors alleged that from 1995 until 2007, Lloyds agents in Britain and Dubai "falsified outgoing US wire transfers that involved countries or persons on US sanctions lists."
According to court documents, "Lloyds deliberately removed material information -- such as customer names, bank names and addresses -- from payment messages so that the wire transfers would pass undetected through filters at US financial institutions."
This process of "repairing" or "stripping" the transactions allowed more than 350 million dollars to be processed by US banks used by Lloyds that might have otherwise been blocked or rejected due to sanctions regulations.
"For more than 12 years, Lloyds facilitated the anonymous movement of hundreds of millions of dollars from US-sanctioned nations through our financial system," said acting assistant attorney general Matthew Friedrich.
"The Department will continue to use criminal enforcement measures against the knowing and intentional evasion of US sanctions laws, particularly where such conduct has the potential to finance terrorist activities."
The bank agreed to forfeit 175 million dollars to the United States and 175 million to New York County.
"The Department will recommend the dismissal of the (charges) in two years, provided Lloyds fully cooperates with, and abides by, the terms of the agreement," the statement said.
In their statement on the penalties Lloyds claimed it is "committed to running our business with the highest levels of integrity and regulatory compliance across all of our operations."
Describing the actions as "certain historic US dollar payment practices," Lloyds said it has "committed substantial resources to a thorough internal investigation," adding that the results of their review had been shared with US investigators.
The bank said in a statement that it is "gratified" that the US agencies recognize it "provided prompt and substantial cooperation throughout their investigation."
Date created : 2009-01-10