FinCEN names BPA in laundering probe


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The tiny principality of Andorra has thrived as an international banking location in recent years, but an announcement last week by the U.S. Department of Treasury has shaken up the fast-growing banking sector of the nation.

Specifically, the U.S. Treasury has leveled serious money-laundering allegations related to Banca Privada D’Andorra’s servicing of accounts of international criminal gangs, especially from Russia and China. Moreover, the scandal’s allegations have spilled over to BPA’s Spanish unit Banco Madrid, and prosecutors there are investigating more than 20 former Spanish politicians for questionable financial dealings.

According to a FinCEN press release, U.S. Treasury officials believe that “high–level managers at BPA have knowingly facilitated transactions on behalf of third–party money launderers acting on behalf of transnational criminal organizations.”

“BPA’s corrupt high–level managers and weak anti–money laundering controls have made BPA an easy vehicle for third–party money launderers to funnel proceeds of organized crime, corruption, and human trafficking through the U.S. financial system,” said FinCEN Director Jennifer Shasky Calvery. “Today’s announcement is a critical step to address this compromised financial institution’s egregious conduct and send a message that the United States will take strong measures to protect the integrity of its financial system from criminal actors.”

Treasury officials described some of the strategies that criminals are using to access the U.S. financial system via third-party money launderers and correspondent accounts. Any financial institution doing business with BPA should apply special due diligence to all transactions, according to FinCEN.

“International financial institutions are welcome to provide a conduit for their customers to utilize American banks, as long as they abide by our laws that govern those transactions,” said Richard Weber, Chief, IRS Criminal Investigation. “However, when senior managers of these institutions turn to corruption and bribery to enrich themselves, they should not be surprised when special agents from IRS CI come knocking at their door. IRS Criminal Investigation will continue to work with law enforcement and financial partners to investigate these institutions and senior officials who misuse their positions of trust to facilitate third-party money launderers acting on behalf of transnational criminal organizations.”

According to FinCEN, “third-party money launderers engage in the business of transferring funds on behalf of a third party, knowing that the funds are involved in illicit activity. Third-party money launderers use their relationships with financial institutions to provide criminal organizations access to the international financial system and lend an aura of legitimacy to the criminal actors who use their services. Some third-party money launderers explicitly market their services as a method for criminal networks to reduce transparency and circumvent financial institutions’ anti-money laundering (AML)/countering the financing of terrorism (CFT) controls.” Financial institutions that facilitate third-party money laundering activity allow criminals to circumvent AML/CFT controls both in the United States and internationally and thus provide a gateway to undermining the integrity of the financial system.


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