Fearing Taint, Banks Shy Away from Embassy Money

Print

Inside safe deposit boxes at Riggs Bank is more than $710 million in cashier’s checks that Riggs doesn’t want. Neither does any other bank. The stash, once in checking accounts held by the embassies of Saudi Arabia and Equatorial Guinea, is likely to grow. After being fined $25 million for violating anti-money-laundering laws in its embassy banking division, Riggs has asked more than 100 embassy clients to find other banking arrangements by mid-July.

The business, in the words of one area banker who has refused to accept it, is proving “toxic.” The embassy of Saudi Arabia, a key focus of the regulatory probes at Riggs, and a number of African and South American countries are having so much trouble finding a new bank that the State Department has asked banking regulators to step in. Nearly a quarter of Riggs’s $4.2 billion in deposits at the end of 2003 was in embassy banking. Riggs was fined for not following proper anti-money-laundering procedures in its embassy banking business, and failing to file “suspicious activity reports” to regulators on more than two dozen large and unusual transactions conducted by the Saudi ambassador, Prince Bandar bin Sultan, and other officials at the Saudi and Equatorial Guinean embassies going back to 2001.

Link: http://www.washingtonpost.com/wp-dyn/articles/A29674-2004Jun9.html

Comments are closed.