LawFuel.com – AmLaw Daily – A day after Credit Suisse announced it had agreed to pay $536 million to settle charges that it conducted business in the U.S. on behalf of Iran, the government filed papers in Washington federal district court that shed new light on the bank’s activities. According to the deferred prosecution agreement, Credit Suisse helped Iranian customers and banks skirt U.S. sanctions by disguising the source of payments to other banks. To accomplish this, it removed Iranian names and references from payment messages, used code words for sanctioned entities, and instructed Iranian customers on how to format dollar-denominated payments to evade detection. These activities violated regulations under the International Emergency Economic Powers Act.
King & Spalding partners Christopher Wray and Andrew Hruska represented Credit Suisse, according to court documents. The lawyers did not return calls left on Wednesday.
According to Justice Department prosecutors, Credit Suisse had helped customers in countries such as Libya avoid sanctions as far back as 1986. Its efforts in Iran stretched at least into the mid 1990s, but business with the country picked up in 2003 after British bank Lloyds decided to terminate its business with Iranian customers. [Hat tip to The Blog of Legal Times.]
In December 2005, Credit Suisse decided to exit the business under scrutiny and began an internal investigation. The company said it ended its business with all parties subject to U.S. sanctions in 2006, including closing an office in Iran.
The $536 million is to be split between federal and New York authorities, who joined the investigation. “This will be the biggest settlement ever coming to New York,” Manhattan district attorney Robert Morgenthau said in an interview with Bloomberg News on Tuesday. “If you violate U.S. sanctions, you’re going to pay a big financial penalty.”
