Lloyds TSB and Bank of Cyprus Fined $130 Million and $162 Million
Lloyds TSB accused of money laundering in US screams the headline in today’s Financial Times and so we have not one but two other banks in the cross hairs of federal prosecutors. Also charged, the Bank of Cyprus is denying the “civil money laundering charges filed against it by U.S. prosecutors, saying the case was legally and factually without merit, reports Reuters. Like Bank of Cyprus, Lloyds TSB vows to “vigorously” fight these charges, reports Marketwatch, and quotes this statement from the bank, “We do not believe there is any basis for this action so we are disappointed that the U.S. Government has commenced proceedings in this case.”
For allegedly assisting international fugitive Lycourgos Kyprianou, former chairman of AremisSoft Corp, in his money laundering and securities fraud activities, the feds are seeking civil penalties of $130 million from Lloyds TSB and $162 million from Bank of Cyprus. These fines, incidentally are the largest money laundering penalties ever, according to Charlie Intriago’s moneylaundering.com. Forbes also reports, that “If found guilty Lloyds may have to pay out more in anti-money laundering fines than all other U.S. banks combined over the past six years.”
These cases are a bit different than recent actions against American Express for $65 million and Union Bank of California for $31 million both in the size of the fines and the fact that the accused firmly believe in their innocence and they’re willing to fight to prove it. The reputational costs to Lloyds TSB has already had an impact — at press time the company’s stock had fallen 2.96 percent.
If Lloyds TSB and Bank of Cyprus can successfully defend themselves against these charges, then it will set precedent that will surely have an impact upon future prosecutions. Hopefully then Congress will get serious about rewriting the Bank Secrecy Act.
How this all plays out will be very interesting to watch.
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