UK bank settles Iran money probe in NY for $340M
ALBANY, New York (AP) — A British bank accused of scheming with the Iranian government to launder billions of dollars will be subject to two years of monitoring at its New York branch and will tighten offshore monitoring as part of a $340 million settlement with financial regulators. But the U.S. government still could take action.
Standard Chartered Bank's dealings with Iran are still being investigated by the U.S. Department of Justice, the Treasury and the Federal Reserve.
In a brief statement to the market, Standard Chartered said Wednesday that it "continues to engage constructively" with the other U.S. agencies.
The U.S. imposes financial sanctions on political enemies to hinder their access to the global financial system. The goal is to choke off banks and other sources of capital, limiting their economic growth and their ability to buy weapons, food and other items available through global trade. Sanctions ensure that U.S. banks don't get involved.
New York state's banking regulator Benjamin Lawsky announced the settlement Tuesday. Standard Chartered spokeswoman Julie Gibson said a formal agreement with details was expected shortly.
The bank's stock has fallen by nearly 12 percent since the regulator announced its charges last week.
Standard Chartered Bank said Monday it "strongly rejects" and "contests" the regulators' portrayal of its transactions with Iranian banks.
Lawsky earlier had signed an order that required the London-based bank to answer his questions following an investigation into the practice of removing crucial identifiers in financial transactions, called wire stripping.
The bank conspired with its Iranian clients to route nearly 60,000 U.S. dollar payments through its New York branch "after first stripping information from wire transfer messages used to identify sanctioned countries, individuals and entities," according to the agency's order.
The order said the transactions provided the bank with millions of dollars in fees when such trade was restricted. Lawsky said the scheme left the U.S. financial system "vulnerable to terrorists."
The state agency called the bank a rogue institution and quoted one of its executives as saying: "You (expletive) Americans. Who are you to tell us, the rest of the world, that we're not going to deal with Iranians."
The bank's statement said "well over 99.9 percent" of the questioned transactions with Iran complied with all regulations and the few transactions that didn't amounted to $14 million.
It said none of its Iranian payments was on behalf of any designated terrorist group.
Several other non-U.S. banks with operations in the United States have settled sanctions cases with U.S. authorities in recent years. Dutch bank ING Bank NV agreed in June to pay $619 million to settle charges that it secretly moved billions of dollars through the U.S. financial system on behalf of Iranian and Cuban customers.
Associated Press Business Writer Marcy Gordon in Washington, D.C., contributed to this report.