Andorra’s Banca Privada d’Andorra Identified as a Foreign Financial Institution of Primary Money Laundering Concern by FinCEN

Washington, DC - The US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has identified Banca Privada d’Andorra (BPA) as a foreign financial institution of primary money laundering concern. The designation, made under Section 311 of the USA PATRIOT Act, comes after a years-long investigation into high-level managers at the Andorran bank knowingly facilitating transactions for third-party money launderers acting on behalf of transnational criminal organizations.

FinCEN’s Statement

FinCEN Director Jennifer Shasky Calvery stated, “BPA’s corrupt high-level managers and weak anti-money laundering (AML) controls have made this Andorran bank an ideal vehicle for third-party money launderers to funnel proceeds of organized crime, corruption, and human trafficking through the US financial system.” The announcement marks a significant step to address the egregious conduct of the compromised institution and send a clear message regarding the United States’ commitment to protecting its financial system from criminal actors.

Third-Party Money Launderers and Transnational Criminal Organizations

The threat posed by third-party money launderers to financial institutions continues to be a significant concern. Transnational criminal organizations may find it challenging to directly access financial institutions due to their illicit activities. In response, some criminal organizations enlist third-party money launderers, including professionals such as attorneys and accountants. The majority of BPA’s activity of primary money laundering concern occurred at its headquarters in Andorra, making it one of the five Andorran banks and a subsidiary of the BPA Group, a privately-held entity.

Transactions and Correspondent Accounts

The transactions involved proceeds from organized crime in Russia and China, foreign corruption, and other criminal activity. BPA accessed the US financial system via direct correspondent accounts held at four US banks, through which BPA processed hundreds of millions of dollars. High-level managers at BPA established financial services customized for their third-party money launderer clients, accepting payments and other benefits in exchange.

Facilitators and their Clients

Two high-level managers at BPA in Andorra facilitated transactions for third-party money launderers. One manager provided substantial assistance to a third-party money launderer named Andrei Petrov, who worked for Russian criminal organizations engaged in corruption. Spanish law enforcement arrested Petrov for money laundering in February 2013 and suspects him of having links to Semion Mogilevich, one of the FBI’s “Ten Most Wanted” fugitives.

The second high-level manager at BPA accepted exorbitant commissions to process transactions related to Venezuelan third-party money launderers. This activity involved the development of shell companies and complex financial products to siphon off funds from Venezuela’s public oil company, Petroleos de Venezuela (PDVSA). BPA processed approximately $2 billion in transactions related to this money laundering scheme.

Crackdown on BPA and Correspondent Accounts

“We are witnessing an increasing trend of businesses and business professionals being recruited by transnational criminal organizations to facilitate corrupt practices, such as creating shell corporations and fronts for money laundering and other illegal activity,” said Peter Edge, HSI Executive Associate Director. The proposed rulemaking, if adopted as a final rule, would prohibit US financial institutions from opening or maintaining correspondent or payable-through accounts for BPA and other foreign banks processing transactions involving BPA. Covered financial institutions would also need to apply special due diligence to their correspondent accounts on behalf of foreign banks, ensuring they do not process transactions related to BPA.

Contributors to the Investigation

The US Department of Justice, Criminal Division, Asset Forfeiture and Money Laundering Section, the US Attorney’s Office for the Eastern District of Texas, US Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), and the Internal Revenue Service Criminal Investigation contributed to the investigation.