May 23, 2017 / 9:06 PM / 2 years ago

U.S. court rules against Andorran bank accused of money laundering

    By Joel Schectman
    WASHINGTON (Reuters) - A federal appeals court in Washington
ruled on Tuesday against owners of the now defunct Banca Privada
d’Andorra S.A. who had sought to reverse an order by the U.S.
Treasury Department declaring the institution a "primary money
laundering concern."
    A three-judge panel rejected calls by Ramon and Higini
Cierco, former owners of the Andorran bank known as BPA, to rule
the Treasury action illegal, capping a lawsuit that had attacked
the Treasury Department's authority to issue orders against
banks based on secret evidence. 
    The case shows the power U.S. financial regulators can use
against banks accused of money laundering. In 2015, the Treasury
Department's Financial Crimes Enforcement Network (FinCEN) said 
BPA had helped organized crime groups from Venezuela to China
launder billions of dollars. The next day Andorran authorities
moved to seize the bank and liquidate its accounts. 
    The bank says the order from the Treasury caused it to go
out of business.
    The Ciercos' attorney Eric Lewis of Lewis Baach Kaufmann
Middlemiss PLLC told Reuters that much of the activity described
by FinCEN had already been self-reported by the bank, which had
worked to root out suspicious activity. The Ciercos sued FinCEN
to reverse its order.    
    But a few months later, FinCEN withdrew its order saying
that since the bank was already out of business it no longer
posed a money laundering threat. 
    "It's like a cop shoots someone in the head and says there's
no point in charging him anymore," said Manuel Varela, another
lawyer for the Ciercos. 
    A FinCEN spokesman declined to comment.     
    A U.S. district court in Washington dismissed the case last
year ruling that since FinCEN had already withdrawn the order,
it was no longer relevant. Lewis said he had hoped that a trial
would have cleared the Cierco family name by proving that FinCEN
had relied on flimsy evidence provided by Andorran authorities
to declare the bank a money laundering concern. 
    But the appeals court panel upheld the ruling on Tuesday.
    Last week, the Ciercos filed a lawsuit against FinCEN in
Washington federal court to force the release of correspondence
between FinCEN and Andorran authorities, which the family's
attorneys believe will show the United States inappropriately
pressured Andorran authorities to seize BPA assets. 
    "It's another way to get accountability and to show that the
Ciercos were essentially used as sacrificial lambs over a
regulatory fight between the U.S. and Andorran authorities,"
Lewis said. 
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