Lloyds Bank Agrees to Forfeit $350 Million for IEEPA Violations Involving Iran, Sudan, Etc.
The Justice Department reports that Lloyds TSB Bank plc, a United Kingdom corporation headquartered in London, has agreed to forfeit $350 million to the U.S. and to the New York County District Attorney's Office in connection with violations of the International Emergency Economic Powers Act (IEEPA).
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The violations relate to transactions Lloyds illegally conducted on behalf of customers from Iran, Sudan and other countries sanctioned in programs administered by the Office of Foreign Assets Controls (OFAC).
Lloyds agreed to forfeit the funds as part of deferred prosecution agreements and has accepted and acknowledged responsibility for its criminal conduct.
(Under the IEEPA, it is a crime to willfully violate, or attempt to violate, any regulation issued under IEEPA, including the Iranian Transactions Regulations, which prohibit exportation of services from the U.S. to Iran, and the Sudanese Sanctions Regulations, which prohibit exportation of services from the U.S. to Sudan.)
From 1995-2007 Lloyds Falsified Certain Wire Transfers to Evade U.S. Sanctions
According to court documents, beginning as early as 1995 and continuing until January 2007, Lloyds, in both the UK and Dubai, falsified outgoing U.S. wire transfers that involved countries or persons on U.S. sanctions lists. Specifically, according to court documents, Lloyds deliberately removed material information - such as customer names, bank names and addresses - from payment messages so that the wire transfers would pass undetected through filters at U.S. financial institutions.
This process of "repairing" or "stripping," as Lloyds commonly referred to it, allowed more than $350 million in transactions to be processed by U.S. correspondent banks used by Lloyds that might have otherwise been blocked or rejected due to sanctions regulations or for internal bank policy reasons. According to court documents, the criminal conduct by Lloyds was designed to evade, and to assist its customers in evading, U.S. economic sanctions imposed against Iran, Sudan and other countries.
(See ITT's Online Archives or 06/17/08 news, 08061715, for BP summary of OFAC's amendment of its sanctions programs to reflect new IEEPA penalty provisions.
See ITT's Online Archives or 10/23/07 news, 07102325, for BP summary of the President's signing the International Emergency Economic Powers Enhancement Act into law.)
Justice Dept. press release (dated 01/09/09) available at http://www.justice.gov/opa/pr/2009/January/09-crm-023.html