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Amex Bank to Pay in Money Launder Case

November 22, 1994| From Associated Press

HOUSTON — An American Express Co. subsidiary has reached a $50-million settlement with the government that prosecutors said includes the biggest civil fine ever assessed against a U.S. bank for money laundering.

The settlement with American Express Bank International, which provides banking services to overseas clients of American Express Bank, stemmed from an investigation of a Mexican drug ring that allegedly smuggles hundreds of tons of Colombian cocaine a year into the United States.

Two officers from the Beverly Hills, Calif.-based bank were convicted earlier this year in the money laundering scheme.

"This case is important because it accomplishes an important goal in the war against drugs by taking the profit--money from the drug dealers--and eliminating the principal money laundering avenue," U.S. Atty. Gaynelle Griffin Jones said in announcing the settlement reached Friday.

Under the settlement, the government agreed not to seek criminal charges against the bank.

The bank agreed to forfeit $40 million that prosecutors contend was laundered by the former bank officers, Antonio Giraldi and Lourdes Reategui.

The bank was fined $7 million in civil penalties and agreed to spend $3 million on training and audit procedures to follow federal banking guidelines.

The only larger civil penalty in this country was $200 million against Bank of Credit & Commerce International, the multinational bank shut down by regulators in 1991 for widespread fraud.

Prosecutors charged that the bankers in the American Express International case set up elaborate international transactions to hide the origin of drug profits in the accounts of their biggest client, Ricardo Aguirre Villagomez, a money launderer for reputed Mexican drug lord Juan Garcia Abrego. Both men are wanted in the United States, Aguirre for money laundering and Garcia Abrego on drug smuggling charges.

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