Barclays Plc, HSBC Holdings Plc and four other banks were accused in a lawsuit by U.S. soldiers of helping Iran process billions of dollars in transfers and finance terrorists who attacked Americans serving in Iraq.
Lenders including Standard Chartered Bank, Credit Suisse Group AG and Royal Bank of Scotland NV conspired with Iran and its banks to withhold certain data from transactions, enabling them to circumvent monitoring by U.S. regulators, the soldiers said in a complaint yesterday in federal court in Brooklyn, New York.
The conspiracy, dating back to 1987, provided Iran with a means to transfer at least $150 million to Hezbollah and other terrorist and militant groups, allowing them to carry out dozens of roadside bombings and other attacks against the U.S. military, according to the complaint.
“This is a lawsuit that could materially alter the U.S. banking landscape,” Sandy Chen, an analyst at Cenkos Securities Plc in London, said in a note to clients. “If these allegations are shown to be true, an avalanche of anti-terrorism legislation would tumble upon these non-U.S. banks” including a “possible suspension of U.S. banking licenses,” he added.
‘Larger Scheme’
Each bank “understood that its conduct was part of a larger scheme engineered by Iran,” according to the complaint. “Each defendant also knew, or was deliberately indifferent to the conspiracy’s purposes and criminal objectives.”
Soldiers wounded in attacks and families of those who were killed are seeking unspecified damages.
Representatives of Barclays, HSBC, Royal Bank of Scotland, Credit Suisse and Standard Chartered declined to comment on the lawsuit. A call to the offices of another defendant, a U.K. unit of Iran’s Bank Saderat, wasn’t immediately returned.
Standard Chartered agreed in August 2012 to pay $340 million to the New York Department of Financial Services for its role in hiding or disguising the identity of Iranian clients in billions of dollars worth of wire transfers. In December of that year, the bank agreed to pay $327 million to resolve similar issues with the U.S. Justice Department, the Federal Reserve, the Treasury Department’s Office of Foreign Assets Control and the Manhattan District Attorney.
Arab Bank