AMEX subsidiary fined
MONEY LAUNDERING CASE SETTLED FOR $32 MILLION
DALLAS -- A banking arm of the American Express
Company agreed to pay a $32 million settlement
Monday in a money-laundering case involving
Mexico's largest drug cartel. The cartel is a
principal conduit for Colombian cocaine entering
the United States.
Prosecutors said it was the largest civil
penalty ever assessed against an American financial
institution for laundering money.
American Express Bank International was accused
of laundering drug money through Cayman Islands
accounts for the Juan Garcia Abrego gang, also
known as the Gulf cartel. Two bank directors were
convicted in June.
In a prepared statement, the company admitted no
wrongdoing but said that it had legal
responsibility for its employees' actions, and
agreed to forfeit $25 million US in laundered
money, pay a $7 million penalty and spend $3
million to improve a compliance program that a
prosecutor said existed only on paper.
Under the settlement, in a case filed in federal
court, the government agreed not to seek criminal
charges against the bank.
"We are combating money laundering in an effort
to curb the drug traffic," said the prosecutor,
assistant US attorney David Novack. "If we hit the
money laundering, we can shut off the avenue where
they hide their profits."
American Express Bank International put the case
in the context of the increasing sophistication and
complexity of international money laundering.
"No matter how strong an institution's financial
compliance program may be, there's no guarantee of
compliance by individuals who choose to circumvent
the law," said Pamela Hanlon, a bank
representative.
-- New York Times News Service
Sid Shniad
