Standard Chartered was sued by victims of the 1983 Iran-sponsored terrorist bombing of U.S. Marine barracks in Lebanon over allegations the bank conspired with Iran to hide assets and evade a $2.7 billion default judgment.
The plaintiffs said that after they obtained the judgment in 2007, the bank conspired with "Iran and its agents to hide Iran's assets from its judgment creditors."
"Those unlawful actions are part and parcel of Iran's longstanding, determined efforts to evade collection of the judgment and other judgments obtained by the victims of Iran's ongoing terror campaign," the plaintiffs said in the suit, filed yesterday in U.S. District Court in New York.
Julie Gibson, a spokeswoman for Standard Chartered, declined to comment on the suit. Bank officials said Standard Chartered stopped its Iranian payments business.
The suit includes claims of tortious interference and seeks unspecified damages from Standard Chartered. Plaintiffs were identified as victims and survivors of the bombing, relatives and heirs of victims, and representatives of injured service members. The attack killed 241 U.S. Marines, soldiers and sailors on Oct. 23, 1983, according to the U.S. Department of Defense.
Standard Chartered assisted Iranian transactions by agreeing to "strip" information "concerning the originators and beneficiaries of over 60,000 wire transfer transactions from the electronic system the banks utilize to conduct wire transfers," the plaintiffs alleged.
As a result, the bank "endeavored to conceal from regulators, criminal authorities and Iran's judgment creditors the participation of Iran and its agencies."
Standard Chartered said in a statement Aug. 14 that it settled a New York money laundering probe for $340 million the day before it was to defend its right to operate in the state.
Benjamin Lawsky, head of the New York Department of Financial Services, accused Standard Chartered of helping Iran launder about $250 billion in violation of federal laws, threatening to remove the London-based bank's license to operate in the state.
The New York regulator said in a statement that "the parties have agreed that the conduct at issue involved transactions of at least $250 billion." The $340 million fine will go to Lawsky's agency, New York's Department of Financial Services, or DFS, and the state.
As part of the settlement, New York said the bank agreed to install an independent on-site monitor for at least two years who will report directly to regulators. Examiners from the DFS will also be placed at the bank.
The settlement may be the largest ever paid to an individual regulator as part of a money laundering accord. In June, ING Bank NV agreed to pay $619 million to settle similar allegations. That sum was split evenly between a $309.5 million payment to the federal government and an equal sum to the Manhattan District Attorney.
Standard Chartered said in a statement that "a formal agreement containing the detailed terms of the settlement is expected to be concluded shortly." It "continues to engage constructively with the other relevant U.S. authorities," the bank said.
The case is Deborah Peterson v. Standard Chartered Bank, 12-cv-6257 Southern District of New York (Manhattan).