January 12, 2009 / 5:07 AM / 11 years ago

U.S. probes European banks over Iran violations: report

(Reuters) - A U.S. investigation into potential sanctions violations has expanded to involve nine European banks, the Financial Times said.

Authorities suspect that some of the money transferred through the American banking system might have been used to finance Iran’s nuclear and missile programs, the paper said.

Investigators found an e-mail indicating that Iranian interests were trying to buy tungsten, which is used for making long-range missiles, the paper cited Manhattan district attorney Robert Morgenthau as saying.

Morgenthau has been conducting the joint investigation with U.S. federal prosecutors, the paper said.

“There was an order for 30,000 metric tonnes of tungsten that would take care of every refrigerator in the Middle East and then some,” Morgenthau told the paper on Sunday.

“It was not being purchased, we think, for domestic consumption . . . Tungsten was not used for making refrigerators but for long-range missiles,” he told the paper. “That is our supposition.”

The e-mail has emerged as part of a broader investigation into whether foreign banks have been “stripping” wire transfer information that would otherwise show that the transfers originated from prohibited sources, the paper said.

The investigation into the nine European banks was continuing, Morgenthau, who declined to identify the lenders, told the paper.

Morgenthau could not be immediately reached for comment by Reuters.

Lloyds TSB Group Plc said last week it had agreed to forfeit $350 million to U.S. authorities in connection with charges it faked records so clients from Iran, Sudan and elsewhere could do business with the U.S. banking system.

Reporting by Ajay Kamalakaran in Bangalore

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