The Andorran lender is alleged to have pushed hundreds of millions of dollars through four US banks at the behest of clients who obtained it through organized crime, corruption and human trafficking.
The affair has led ratings agency Standard & Poor’s to downgrade Andorra’s credit rating. Three managers at the bank have been arrested, including CEO Joan Pau Miquel Prats who was taken into custody Friday. The bank’s board was suspended.
The US treasury’s Financial Crimes Enforcement Network said last Tuesday that the bank’s customers included third-party money launderers working on behalf of criminal organizations from Russia and China, as well as a group siphoning funds from a Venezuelan state oil company.
One such client, Andrey Petrov, was arrested in Spain two years ago on suspicion of helping to launder 56 million Euros (US$ 59.2 million) for Russian organized criminals. A high-level manager at BPA allegedly provided “substantial assistance” to Petrov to disguise the origin of the funds.
In return, Petrov is said to have arranged for the manager to fly to Russia and meet several organized crime figures. Petrov is suspected to be linked to Semion Mogilevich, one of the FBI’s most wanted fugitives.
According to the US Treasury, another senior executive at BPA facilitated a Venezuelan money-laundering network involving hundreds of shell companies with connections to powerful government officials.
These companies are suspected of making fake contracts with Venezuelan public institutions, including the state oil company Petroleos de Venezuela. According to CNN, if true this would mean that the BPA had helped launder US$ 2 billion obtained via public sector corruption through these networks.
The controversy has spilled over the border into Spain where Banco de Madrid, the Spanish arm of BPA, ceased operations yesterday after customer withdrawals led the firm to file for bankruptcy.
According to Reuters, Spanish authorities have raised concerns about whether Banco de Madrid, which manages the accounts of several wealthy Spanish politicians and business figures, was also involved in money laundering. The entire seven-member board of directors at Banco de Madrid has resigned in the wake of the crisis.
