Challenge to Money Laundering Tactic Fails

      WASHINGTON (CN) — A federal judge dismissed claims by Andorran bank owners that the U.S. Treasury tries to duck judicial review in money laundering cases.
     Ramon and Higini Cierco sued the U.S. Treasury and the Financial Crimes Enforcement Network, or FinCEN, for issuing a “death sentence” to the Andorran bank Banc Privada d’Andorra (BPA).
     FinCEN called the bank a “primary money laundering concern,” and ordered U.S. banks to stop doing business with it in 2015, effectively expelling the bank from the U.S. financial system. After Andorran regulators took control of BPA in response to the FinCEN notice, the agency withdrew the notice early this year, finding the bank no longer of “primary money laundering concern,” according to U.S. District Judge James Boasberg’s case summary in his May 18 opinion.
     “The steps taken by the authorities in Andorra sufficiently protect the U.S. financial system from the money laundering risks previously associated with BPA,” FinCEN told the court, in its motion to dismiss.
     The Ciercos called FinCEN’s decision a “blatant effort to avoid any judicial scrutiny of the legality of its actions,” in a February statement through PR Newswire.
     But Boasberg dismissed the case on Wednesday.
     Boasberg’s ruling spells the plaintiffs’ names “Cicero,” but the complaint and the news release spells it name “Cierco.” They claimed that the Treasury insulates itself from judicial review by issuing a notice, prompting foreign governments to take action against a bank, then withdrawing its notice to moot any challenge.
     Boasberg didn’t buy it.
     “Troubling as these accusations may be in the abstract, the court does not believe this characterization is correct,” the judge wrote.
     U.S. District Judge Christopher Cooper, also in the District of Columbia, ruled in August last year that FinCEN had erred by issuing such a notice to FBME bank, which is headquartered in Tanzania but operates primarily out of Cyprus.
     FBME won an injunction against FinCEN’s “death sentence,” and in November the agency asked for a voluntarily remand to revisit the matter rather than appealing.
     In that case, “Treasury issued its final rule before the plaintiffs brought suit, and it did not withdraw that rule either before or after it was challenged — a course of action that undermines plaintiffs’ belief that the government consistently acts to insulate its decisions from review. In sum, although plaintiffs may not act as foreign banks’ standard bearer in this case, others may serve the same role in the future,” Boasberg said.

%d bloggers like this: