Andorra Money Laundering Scandal Rocks Financial System

Washington D.C., March 10, 2015

The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has identified Banca Privada d’Andorra (BPA), a major financial institution in Andorra, as a foreign financial institution of primary money laundering concern.

Corrupt Practices and Weak Controls Exposed

According to FinCEN Director Jennifer Shasky Calvery, BPA’s corrupt high-level managers and weak anti-money laundering controls have made it an easy vehicle for third-party money launderers to funnel proceeds of organized crime, corruption, and human trafficking through the U.S. financial system.

Investigation Reveals Widespread Activity

The investigation revealed that BPA’s activity of primary money laundering concern occurred largely through its Andorra headquarters, where it processed hundreds of millions of dollars in transactions related to the proceeds of organized criminals from Russia and China, foreign corruption, and other criminal activity.

Proposed Regulations Aim to Curb Money Laundering

FinCEN has issued a notice proposing rules that would prohibit U.S. financial institutions from opening or maintaining correspondent or payable-through accounts for BPA, as well as requiring special due diligence on correspondent accounts maintained by foreign banks to guard against processing transactions involving BPA.

High-Level Managers Exposed

The investigation also exposed the activities of three high-level managers at BPA who accepted bribes and exorbitant commissions in exchange for processing bulk cash transfers and other illicit financial transactions.

Quotes from Key Officials

• “This action sends a strong message that the United States will take measures to protect the integrity of its financial system from criminal actors,” said Calvery. “We are committed to working with international partners to combat money laundering and promote national security.”
• “We are seeing an increasing trend where businesses and business professionals are being recruited by transnational criminal organizations to facilitate corrupt practices,” said HSI Executive Associate Director Peter Edge. “These corrupt individuals and institutions put profits at a premium and serve as connections between the licit and illicit worlds.”

The Threat of Third-Party Money Laundering

The investigation highlights the threat posed by third-party money launderers to financial institutions, who often use their relationships with banks to provide criminal organizations access to the international financial system.

FinCEN’s Mission

FinCEN’s mission is to safeguard the financial system from illicit use and combat money laundering and promote national security through the collection, analysis, and dissemination of financial intelligence and strategic use of financial authorities.