More foreign banks probed for U.S. sanctions evasion

WASHINGTON ― The New York County District Attorney’s office will soon announce enforcement actions against additional foreign banks that helped Iran and other U.S.-sanctioned countries access the U.S. financial system, Manhattan District Attorney Cyrus Vance Jr. said on Monday.

Vance did not specify what banks were being targeted, but an official in his office said half a dozen were under investigation.

Since January 2009, three banks: Swiss banking giant Credit Suisse AG , as well as Britain’s Barclays Bank Plc. and Lloyds TSB Bank, have admitted engaging in sanctions-evasion assistance and forfeited a total of more than $1 billion to federal and New York County prosecutors. Some of the money has also gone to the Treasury Department’s Office of Foreign Assets Control.

These payments settled prosecutors’ claims the banks “stripped” wire transfer payment messages of information that would have revealed that sanctioned parties were engaging in U.S. dollar transactions clearing through New York City.

“We hope to have other announcements of investigations … in the near future,” Vance said during a keynote speech at an anti-money laundering conference put on by the American Bankers Association and the America Bar Association in Washington, D.C.

He added foreign financial institutions that “strip” payment messages threaten U.S. national security and that his office is well-positioned to pursue them.

In an interview following the speech, Vance declined to name the institutions under investigation.

“I was as specific as I can be today,” he told Thomson Reuters.

In a separate interview, Adam Kaufmann, chief of the DA’s office’s Investigations Division, said a half dozen financial institutions are under investigation. He added some enforcement actions are expected “in the coming months,” while others are “further down the timeline.”

During his speech, Vance also touted the value of financial institutions’ suspicious activity reports (SARs). He said that in recent months, investigators in his office have “culled for analysis” more than 1,400 SARs, which allow them to see trends in fraud and money laundering as they develop.

He assured conference attendees the reports are not akin to “letters to Santa Claus,” sent without assurance that they will be read by anyone.

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