|(StanChart update) US Justice Department begins probe
British bank Standard Chartered which is at the centre of accusations that it is a rogue bank for having concealed US$250 billion of Iranian money flows, has come under the scrutiny of the US Justice Department, a UK newspaper said.
The Guardian in London, citing a source close to the investigation said the US Justice Department is “looking into allegations that Standard Chartered illegally moved US$250b of Iranian money around the global financial system’’.
A source with direct knowledge of the investigation said the report was now being considered by the justice department, which could pursue a criminal case against the bank and its executives, The Guardian said. The justice department works in conjunction with the Office of Foreign Assets Control, which monitors and enforces US trade sanctions against countries including Iran.
The bank has denied wrongdoing and said the regulator had not provided "a full and accurate picture of the facts". The bank said “99.9 percent’’ of the disputed Iranian transactions had complied with US law.
In May Standard Chartered announced it was ending its business in Iran after decades of international pressure, the paper said.
John Coffee, a law professor at Columbia University in New York, said even a single illegal transaction would be enough to spark a justice department investigation. “There are 20-year sentences for money laundering in the US," he said, the paper reports.
Peter Henning, professor of law at Wayne State University, said: “Standard Chartered's head is on the chopping block."
He said Iran was an oil-rich country that no international bank would chose to ignore.
“But the US and Iran have been at each others throats for 40 years. You have to make a choice," he said.
The Guardian cites James Cox, law professor at Duke University, as saying: “Frankly it looks like the bank turned more than a blind eye in its quest for profits. Once again we see a bank putting personal gain ahead of public interest."
In the UK the Financial Services Authority is keeping a close watch on the situation, as it always does when share prices move so violently, the paper says.