Barclays to pay $298 million in U.S. sanctions case

By James Vicini

WASHINGTON (BestGrowthStock) – Barclays Bank Plc has agreed to pay $298 million to settle criminal charges that it violated U.S. sanctions through dealings with banks in Cuba, Iran, Libya, Sudan and Myanmar, according to U.S. court documents filed on Monday.

The London-based bank was charged with violating the International Emergency Economic Powers Act and the Trading with the Enemy Act as a result of $500 million in illegal transactions from 1995 through 2006, according to the documents.

The United States has imposed sanctions and trade embargoes against Cuba, Iran, Libya, Sudan and Myanmar. Barclays was accused of hiding transactions on behalf of banks in those countries.

“Barclays violated both U.S. and New York state criminal laws by knowingly and willfully moving or permitting to be moved hundreds of millions of dollars through the U.S. financial system on behalf of banks from Cuba, Iran, Libya, Sudan and Myanmar,” according to the documents.

“To hide these illegal transactions, Barclays altered and routed payment messages” to ensure that the prohibited transactions could clear its branch in New York and other U.S. financial institutions, according to the documents.

Barclays spokesman Michael O’Looney in New York said the bank and the U.S. Justice Department were in the process of seeking court approval of a deferred prosecution agreement over U.S. dollar payments “involving countries, persons and entities subject to U.S. economic sanctions.”

“Because this matter is pending before the court, at this time we will have no further comment,” he said.

SIMILAR CASES

The Barclays case marked the latest in a series brought by U.S. prosecutors against major banks.

In December, prosecutors detailed a decades-long scheme by Credit Suisse Group AG to hide thousands of transactions on behalf of clients in Iran, Sudan, Libya and other nations. The Swiss bank agreed to pay $538 million.

Also last year in a similar case, Lloyds TSB agreed to forfeit $350 million over charges that it faked records so clients from Iran, Sudan and elsewhere could do business in the U.S. banking system.

In March, U.S. authorities said Wachovia Bank, now a unit of Wells Fargo & Co, agreed to pay $160 million to settle U.S. charges that it failed to stop more than $100 million of Colombian and Mexican drug traffickers’ money being laundered through accounts at the bank.

Barclays has agreed to pay $149 million to the U.S. government and a separate $149 million in a deferred prosecution agreement with the district attorney in New York, according to the documents.

Barclays and U.S. prosecutors entered into a deferred prosecution agreement that lasts 24 months. A federal judge must approve the agreement. Should Barclays comply with the terms, the charges would be dismissed in two years.

Barclays voluntarily disclosed some of the prohibited transactions to U.S. authorities, agreed to cooperate fully and conducted an internal investigation, according to the documents filed in federal court in Washington, D.C.

According to the documents, Barclays interviewed more than 175 current and former employees and reviewed more than 100 million records during its review, and has acknowledged responsibility for its actions.

A federal judge in Washington held a hearing on the agreement, but delayed approving it because the Barclays official who signed it was not present in court, a Justice Department spokeswoman said.

She said it was not known when the hearing would be held, but it likely would be later this week.

(Additional reporting by Maria Aspan in New York; Editing by Lisa Von Ahn and Gerald E. McCormick)

Barclays to pay $298 million in U.S. sanctions case