U.S. says Credit Suisse schemed to evade sanctions

Wed Dec 16, 2009 7:00pm EST
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By James Vicini, Dan Margolies and Lisa Jucca

WASHINGTON/ZURICH (Reuters) - U.S. and Manhattan prosecutors detailed on Wednesday a "decades-long scheme" by Credit Suisse to hide thousands of transactions on behalf of clients in Iran, Sudan, Libya and other nations, and said the Swiss bank had agreed to pay $538 million in fines.

More than $1.6 billion was moved through the U.S. financial system through the transactions, prosecutors said.

Manhattan District Attorney Robert Morgenthau told a news conference that other banks were being investigated for similar transactions.

"There will be other prosecutions," he said. "Not only of financial institutions, which carry the money, but also of the suppliers."

In Zurich, a source who declined to be identified, said nine banks were involved and that four had settled, including Lloyds TSB Group of Britain and Credit Suisse.

While the majority of the transactions involved Iran, other transactions violated U.S. sanctions against Sudan, Libya, Myanmar, Cuba, and the former Liberian regime of Charles Taylor, the U.S. Treasury Department said in a statement.

The department called the settlement the "most significant" in the history of its Office of Foreign Assets Control and said the penalty could have been "substantially higher" had the bank not cooperated with the government over the past two years and agreed to take remedial action.

A "BLIND EYE"   Continued...

<p>A woman walks past a branch of a Credit Suisse bank in Zurich February 9, 2009. REUTERS/Christian Hartmann</p>