Spain takes over unit of Andorra bank in laundering probe

AP News
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Posted: Mar 11, 2015 10:34 AM
Spain takes over unit of Andorra bank in laundering probe

MADRID (AP) — Spain's central bank has taken over a bank that caters to the rich following accusations by the United States that its Andorran owner was involved in laundering money for criminal groups from China, Russia and Venezuela.

The Bank of Spain has put two employees in charge of Banco de Madrid SA, which has 23 branches around the country and is owned by Banca Privada d'Andorra.

BPA has yet to respond Wednesday to messages seeking comment, a day after the central bank said it was taking action in the wake of a decision by the U.S. Treasury Department's financial crimes enforcement network that described BPA a foreign financial institution "of primary money-laundering concern."

However, the bank's Spanish unit, Banco de Madrid, said in a statement that it operates independently from BPA and was confident that Spanish bank regulators will find it "in compliance with laws and regulations."

Following the U.S. declaration, Andorra's government intervened in BPA, putting two controllers in charge of the bank while insisting that the bank's deposits and solvency were not at risk.

The Treasury Department said one unnamed high-level BPA manager accepted "exorbitant commissions" to develop shell companies that helped Venezuelan money launderers siphon about $2 billion from Venezuela's national oil company, Petroleos de Venezuela SA.

Two other BPA managers helped alleged Russian and Chinese money launderers who were previously arrested in Spain, the department said in a statement. Money laundering was also said to have been performed for "numerous" Spanish business owners.

The unnamed BPA managers are said to have accessed the U.S. financial system via four U.S. banks that were — again unnamed — processing hundreds of millions of dollars.

Tiny Andorra, which has a population of 85,000, is wedged between Spain and France in the Pyrenees mountains. It is known mainly as a destination for skiing, shopping and banking.