Washington: Lloyds TSB Bank PLC has agreed to forfeit $350 million for helping customers skirt US sanctions on business transactions with Sudan, Iran and Libya.
The bank, headquartered in London, admitted responsibility for criminal conduct under a deferred prosecution deal filed Friday in federal court in Washington.
In announcing the settlement, the Justice Department said that as early as 1995, Lloyds falsified wire transfers involving countries or individuals on US sanctions list.
The bank was accused of deliberately removing customer information a process Lloyds employees referred to as “stripping” so that wire transfers would pass undetected through filters at US financial institutions.
“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 assistant attorney general Matthew Friedrich.
To settle the investigation by the Justice Department and the New York district attorney, Lloyds waived indictment and agreed to the filing of a criminal information. The company will forfeit $175 million to both the United States and New York County, officials said.
“We are committed to running our business with the highest levels of integrity and regulatory compliance across all of our operations and have undertaken a range of significant steps to further enhance our compliance programs,” the bank said in a statement announcing the agreement. Under the terms of the deal, the bank is required to cooperate fully with US authorities for the next two years.
Manhattan district attorney Robert Morganthau said the case against Lloyds grew out of an investigation into suspicious money transfers by alleged Iranian front companies and charities in New York.
After the 2001 terror attacks, the US intensified scrutiny of banks that might be moving money related to terrorists or rogue regimes.
As a result, according to court documents, Lloyds executives decided in 2003 to stop providing stripping services to Iranian banks with branches in England, though it continued to do so for four Sudanese banks until January 2007. The US lifted its sanctions on Libya in 2004.
Most of the money some $300 million was moved on behalf of Iranian banks between 2002 and 2004, according to prosecutors. Lloyds helped move $20 million on behalf of Sudanese bank customers and about $20 million on behalf of a single Libyan customer, according to the court filing. The US lifted its sanctions against Libya in 2004.
LLoyds Bank is a wholly owned subsidiary of Lloyds TSB Group PLC, which as of December 2007, held assets of $700 billion, employing more than 67,000 people.
Under the deal struck with investigators, the bank has nine months to turn over all the data it still has that was removed from past money transfer records. US authorities said Friday night they plan to analyze that information to determine how much, if any, of the money was used to promote terrorism.