<p>Credit Suisse is expected to pay a fine of more than $500 million to settle accusations by the US government and New York state authorities that it violated sanctions by helping Iran and other countries secretly funnel hundreds of millions of dollars through American banks.<br /><br />Investigators found that the bank, the second largest in Switzerland, removed information from American-bound wire transfers that would have signalled that the money originated in Iranian banks, according to a law enforcement official briefed on the case.<br /><br />In a statement, Credit Suisse confirmed that it would most likely pay $536 million in a settlement. The release did not provide details about the case, other than to say that it involved dollar payments from 2002 through April 2007 for “parties that are subject to US economic sanctions.”<br /><br />Internal investigation<br />Credit Suisse said it began an internal investigation into the situation in December 2005 and has since changed its practices, including termination of all business with organisations that have been subject to sanctions by the Office of Foreign Assets Control, closing an office in Tehran and appointing a global sanctions compliance officer. An official settlement, which will allow Credit Suisse to avoid prosecution, is expected to be announced.<br /><br />In October, Robert M Morgenthau, the Manhattan district attorney, announced that his office, the justice department and the Federal Reserve were working on a case against a large international ‘mainstream bank’ for allowing illicit financial transactions with Iran, which has long been subject to sanctions by the US government.<br /><br />In the following weeks, Credit Suisse officials had been negotiating the amount of the fine with federal and state authorities. Morgenthau has declined comment. His office is expected to split the settlement amount evenly with the federal authorities. Under a new state law, Morgenthau’s office would then disburse his office's share -- $268 million -- equally between New York City and the state. The $268 million would be the largest financial settlement that the Manhattan district attorney's office has ever secured.<br /><br />Federal and state authorities reached a similar settlement in January with Lloyds TSB, a London-based bank now under British government control. In that case, Lloyds agreed to pay $350 million to settle accusations that it had removed identifying information from transactions originating in Iran, Libya and Sudan. But in the Lloyds case, the authorities were not able to identify specific Iranian organisations that were carrying out the transactions or what was being purchased.<br /><br />Illicit transaction<br />The authorities identified more than 7,000 illicit transactions that Credit Suisse facilitated, worth about $700 million, a law enforcement official said. Investigators found an additional $1.1 billion in transactions that had been manipulated, but they have not deemed them as violating sanctions in this case, the official said. Investigators found that Credit Suisse's employees violated both state and federal laws by falsifying outgoing dollar payment messages that involved Iran. The bank’s employees removed reference to Iran or its banks, a practice called stripping.<br />Not only did Credit Suisse employees strip the wire transfers, but they also advised the Iranian banks on how to format their transfers to avoid detection, according to the official. As a result, investigators say, Iranian banks like Bank Saderat and Bank Melli were able to use Credit Suisse to send more than a billion dollars through New York banks undetected.<br /><br />The Atomic Energy Organisation is said to have ties with Iran's nuclear weapons programme, while Aerospace Industries works with long-range missiles, the authorities said. Law enforcement officials said they thought the organisations had been buying materials for their programmes. The sellers, most of whom were outside the US, wanted dollars, and so the money passed through Manhattan banks, law enforcement officials said. Credit Suisse also facilitated smaller transactions for banks in other sanctioned countries, including Cuba, Sudan, Burma and Libya.<br />It has not been a good year for Swiss banks in the US. In February, UBS was fined $780 million by the justice department for helping about 50,000 wealthy Americans evade taxes.<br /></p>
<p>Credit Suisse is expected to pay a fine of more than $500 million to settle accusations by the US government and New York state authorities that it violated sanctions by helping Iran and other countries secretly funnel hundreds of millions of dollars through American banks.<br /><br />Investigators found that the bank, the second largest in Switzerland, removed information from American-bound wire transfers that would have signalled that the money originated in Iranian banks, according to a law enforcement official briefed on the case.<br /><br />In a statement, Credit Suisse confirmed that it would most likely pay $536 million in a settlement. The release did not provide details about the case, other than to say that it involved dollar payments from 2002 through April 2007 for “parties that are subject to US economic sanctions.”<br /><br />Internal investigation<br />Credit Suisse said it began an internal investigation into the situation in December 2005 and has since changed its practices, including termination of all business with organisations that have been subject to sanctions by the Office of Foreign Assets Control, closing an office in Tehran and appointing a global sanctions compliance officer. An official settlement, which will allow Credit Suisse to avoid prosecution, is expected to be announced.<br /><br />In October, Robert M Morgenthau, the Manhattan district attorney, announced that his office, the justice department and the Federal Reserve were working on a case against a large international ‘mainstream bank’ for allowing illicit financial transactions with Iran, which has long been subject to sanctions by the US government.<br /><br />In the following weeks, Credit Suisse officials had been negotiating the amount of the fine with federal and state authorities. Morgenthau has declined comment. His office is expected to split the settlement amount evenly with the federal authorities. Under a new state law, Morgenthau’s office would then disburse his office's share -- $268 million -- equally between New York City and the state. The $268 million would be the largest financial settlement that the Manhattan district attorney's office has ever secured.<br /><br />Federal and state authorities reached a similar settlement in January with Lloyds TSB, a London-based bank now under British government control. In that case, Lloyds agreed to pay $350 million to settle accusations that it had removed identifying information from transactions originating in Iran, Libya and Sudan. But in the Lloyds case, the authorities were not able to identify specific Iranian organisations that were carrying out the transactions or what was being purchased.<br /><br />Illicit transaction<br />The authorities identified more than 7,000 illicit transactions that Credit Suisse facilitated, worth about $700 million, a law enforcement official said. Investigators found an additional $1.1 billion in transactions that had been manipulated, but they have not deemed them as violating sanctions in this case, the official said. Investigators found that Credit Suisse's employees violated both state and federal laws by falsifying outgoing dollar payment messages that involved Iran. The bank’s employees removed reference to Iran or its banks, a practice called stripping.<br />Not only did Credit Suisse employees strip the wire transfers, but they also advised the Iranian banks on how to format their transfers to avoid detection, according to the official. As a result, investigators say, Iranian banks like Bank Saderat and Bank Melli were able to use Credit Suisse to send more than a billion dollars through New York banks undetected.<br /><br />The Atomic Energy Organisation is said to have ties with Iran's nuclear weapons programme, while Aerospace Industries works with long-range missiles, the authorities said. Law enforcement officials said they thought the organisations had been buying materials for their programmes. The sellers, most of whom were outside the US, wanted dollars, and so the money passed through Manhattan banks, law enforcement officials said. Credit Suisse also facilitated smaller transactions for banks in other sanctioned countries, including Cuba, Sudan, Burma and Libya.<br />It has not been a good year for Swiss banks in the US. In February, UBS was fined $780 million by the justice department for helping about 50,000 wealthy Americans evade taxes.<br /></p>