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U.S. Justice Department Seeks Largest-ever Laundering Penalties in Suits Against Lloyds TSB, Bank of Cyprus
By Brian Orsak
printCORRECTION APPENDED The U.S. Justice Department is seeking nearly $300 million in civil money laundering penalties from Lloyds TSB Bank PLC and Bank of Cyprus, charging that the two foreign-based institutions helped to launder the proceeds of a massive securities fraud. The two banks helped an international fugitive living in Cyprus launder millions of dollars from an insider-trading scheme involving shares of software company AremisSoft, prosecutors said in a complaint filed Monday in federal district court in New York. The U.S. is seeking $130 million from London-based Lloyds TSB and $162 million from Bank of Cyprus, making the cases the...
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Lloyds and the Bank of Cyprus are subject to U.S. jurisdiction because Title 18 USC 1956 (b) grants such extraterritorial reach to U.S. courts and because both signed "Consent of Jurisdiction" letters in order to do business in the U.S., according to the Justice Department.
The bank returned its banking license on Jan. 18, three months after the U.S. Justice Department sued the Bank of Cyprus over claims that it aided a Cypriot fugitive launder proceeds from an insider trading scheme.
The cases, seeking nearly $300 million in fines, should be dismissed because they constitute an "unprecedented attempt to apply the U.S. money laundering statute beyond its explicit, but limited" extraterritorial reach, Bank of Cyprus and Lloyds TSB Bank argued in court documents released today.
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