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Credit Suisse fined for assisting Iran, others

- The Washington Times - Thursday, December 17, 2009

Switzerland's second-largest bank agreed Wednesday to pay a $536 million fine after admitting it engaged in illegal business with Iran and other countries banned from doing business in the U.S.

The Credit Suisse Group entered into agreements with the Justice Department and New York state prosecutors to settle an investigation that found the bank made illegal financial transactions and then falsified documents to conceal its wrongdoing.

Most of the illegal transactions involved Iranian banking customers, but prosecutors said the bank also did business in Cuba, Myanmar, Libya and Sudan. It is against U.S. law to provide access to American financial markets for those countries and their businesses.

In all, according to prosecutors, Credit Suisse made more than $1.6 billion in transactions involving those countries from the mid-1990s to 2006.

"Rather than adhere to the law and decline to serve these customers, Credit Suisse established a business model to allow these rogue players access to U.S. dollars," Attorney General Eric H. Holder Jr. said during a news conference. "At one point, the company even developed a pamphlet for its Iranian clients, explaining how to fill out payment messages so as not to trigger U.S. filters. They created a how-to book on committing a crime - and it worked well for years."

According to prosecutors, Credit Suisse stopped its illegal practices in recent years and cooperated with a years-long investigation conducted by the Justice Department, the Federal Reserve, the Internal Revenue Service and the Treasury Department, as well as the Manhattan District Attorney's Office.

Credit Suisse's U.S. operations are based in New York, which is why state prosecutors are involved in the case.

"Credit Suisse is committed to the highest standards of integrity and regulatory compliance in all its businesses, and takes this matter extremely seriously," the bank said in a statement. "Credit Suisse has enhanced its procedures to prevent practices of this type from occurring in the future."

The deferred prosecution agreement that the bank reached with Justice Department means that it will not face further sanctions for violating the International Emergency Economic Powers Act.

Half the fine amount went to the federal government and the rest went to the state of New York.

According to prosecutors, Credit Suisse took great pains to conceal its dealing with the customers of Iranian banks. Credit Suisse would deliberately remove identifying information, such as customers' and banks' names, from transaction documents so that they would pass undetected through the U.S. system.

"This case also provides a critical and timely lesson about the Iranian government's use of deceptive practices to evade sanctions, and the fact that banks that do business with Iran expose themselves to the risk of becoming involved in Iran's proliferation and terrorist activities," said Stuart Levey, Treasury undersecretary for terrorism and financial intelligence.