There still seems to be a lot of indistinctness and misinformation in the case that leads to the closure of FBME Bank Ltd. There is not much information available but the court records show a different perspective than information provided by FBME Bank Ltd. The purpose of this article is to show, based on court records and verdicts of the judges involved what the formal accusations against FBME Bank Ltd. are. These formal accusations are proven in and accepted by US Court and form the basis in FBME Ltd. vs. Lew; 15-cv-0127 (CRC).
Although one is innocent until proven guilty, Judge Cooper’s comments speak for itself. In a response to the final rule, US court gave FBME a possibility to respond. When an agency fails to disclose supporting documents or information, a plaintiff must ‘show that the error was prejudicial’ by indicating with reasonable specificity how it might have responded if given the opportunity. Furthermore a plaintiff must show that on remand it can mount a credible challenge and was thus prejudiced by the absence of an opportunity to do so before the agency.
In his verdict Cooper indicates that FBME has done neither here. The judge responds: ‘The closest FBME has come to indicating how it would have responded to this evidence is to explain that it would have conducted an internal investigation in an attempt to decipher what incident or incidents FinCEN may have been referencing and then try to rebut FinCEN’s interpretation. It has not, as far as the court is aware, undertaken any such investigation or suggested what its response might be.
The court also finds it exceedingly unlikely that FBME could amount a credible challenge on this point.
Having reviewed the entire record, including the classified and unclassified portions, the Court is persuaded that FinCEN has strong enough support for its factual assertion in this regard that any comment from FBME would not make a difference. Finally, FinCEN had a more-than-sufficient basis, apart from this new allegation of fact, to conclude that it could not reasonably rely on a proposed resolution that depends on FBME’s candid provision of complete, credible and accurate information.’
Judge Cooper, furthermore states that: ‘Based on the present record, the Court is not inclined to second guess FinCEN’s exercise of its broad discretion in finding that FBME poses a primary money laundering concern, or its resulting imposition of the fifth special measure.
The Court therefore finds that FBME has not established a likelihood of success on the merits of its claim that FinCEN’s ultimate finding is arbitrary and capricious under the APA.’
It is noteworthy that FBME never challenged the original accusations of FinCEN that resulted in the Notice of Finding and eventually the Final Rule. Especially since the bank firmly states they refrain from any wrongdoing. FBME challenges the administrative procedures (APA) followed by FinCEN to disclose supporting documents or information.
The Notice of Finding and memorandum opinion include some of the findings that resulted in the measures against the bank. In the court records the following is emphatically pointed out:
- “The head of an international narcotics trafficking and money laundering network has used shell companies’ accounts at FBME to engage in financial activity.”
- “An FBME customer received a deposit of hundreds of thousands of dollars from a financier for Lebanese Hezbollah.”
- “A financial advisor for a major transnational organized crime figure banked entirely at FBME in Cyprus and maintained a relationship with the owners of FBME.”
- “FBME facilitated the transfer of over $100,000 to an FBME account involved in a High Yield Investment Program (“HYIP”) fraud against a U.S. person.
- The FBME customer operating the alleged HYIP was indicted in the United States District Court for the Northern District of Ohio for wire fraud and money laundering related to the HYIP fraud.”
- “FBME facilitated the unauthorized transfer of over $100,000 to an FBME account from a Michigan-based company that was the victim of a phishing attack.”
- “An FBME account holder operating as a shell company was the intended beneficiary of over $600,000 in wire transfers generated from a fraud scheme, the majority of which came from a victim in California.”
- “At least one FBME customer is a front company for a U.S.-sanctioned Syrian entity, the Scientific Studies and Research Center (“SSRC”), which has been designated as a proliferator of weapons of mass destruction. The SSRC front company used its FBME account to process transactions through the U.S. financial system, and it shared a Tortola, British Virgin Islands (“BVI”) address with at least 111 other shell companies, including at least one other additional FBME customer that is subject to international sanctions.”
- “FBME’s offshore bank account services were featured prominently on a Web site that facilitates the formation of offshore entities. One Web site that encourages the opening of offshore bank accounts to gamble online notes that FBME in Cyprus is ‘another Europe-based bank we’ve found particularly easy to deal with.”
- An FBME account held by a British shell company received $7.2 million as part of a “pattern of transactions” which were “consistent with allegations in a DOJ complaint” filed “against approximately $70.8 million in real and personal property alleged to be the proceeds of foreign corruption offences perpetrated by the President of Equatorial Guinea, Teodoro Obiang’s son and his associates and laundered through the United States.”
- “FBME conducted at least $387 million in wire transfers through the U.S. financial system that exhibited indicators of high-risk money laundering typologies, including widespread shell company activity, short-term ‘surge’ wire activity, structuring, and high- risk business customers.”
- “FBME was involved in at least 4,500 suspicious wire transfers through U.S. correspondent accounts that totaled at least $875 million between November 2006 and March 2013.”
- “FBME customers, including its many shell company customers, have frequently used FBME’s Cyprus address to conduct collectively tens of millions of dollars of transactions,” a practice that FinCEN noted is “highly unusual and indicative of the bank’s potential complicity in its customers’ illicit activities” because “obscuring the true address of the customer inhibits compliance checks by counterparty or intermediary financial institutions.”
Some of these violations might sound small. However, it is evident that these examples are just a tip of the iceberg and when added together and combined with the findings of the administrators – that will probably be made public in Cyprus court – these findings are serious.
In his order issued in September 2016, Judge Cooper ordered that summary judgment was granted to Lew, in his official capacity as Secretary of the Treasury, et al, except to the extent that FinCEN failed to respond to FBME’s significant comments regarding the analysis of SAR’s data, as outlined in the memorandum opinion. This is the order to ‘stay’ that was cheerfully welcomed by FBME Ltd. Based on the facts it is more likely a temporary reprieve.
This means that FinCEN has to formally respond to the issues raised by FBME. Although Judge Cooper mentioned that he finds it exceedingly unlikely that FBME could amount a credible challenge on this point, in any court of law the plaintiff should be able to execute his lawful right to receive a response.
As indicated by the Central Bank of Cyprus in their filing to Cyprus court in December 2015, the Central Bank will continue with the process to liquidate the bank. Both accounts from the Cyprus branch and the Tanzania accounts that were managed from Cyprus. This means finally some good news for customers with balances that exceed 100.000 Euro and with accounts in Cyprus.
FBME bank Cyprus fund recovery
Are you a customer of the bank and do you want the funds from your blocked bank account to be returned, contact us today. Legal Floris LLC currently represents over 850 customers of FBME Bank, both with accounts in Cyprus as well as Tanzania.
We don’t work for everyone. FBME Bank was shut down for a reason. If there is a suspicion of money laundering, the DGS and liquidator, at a later stage in the process, cannot and will not pay out and simultaneously we reserve the right not to accept you as a customer. We need to know our clients and must be assured about the source of your funds. If you’re a legitimate customer there is nothing to fear. Therefore, contact us today and let’s start the process for recovery right away.