NEW YORK - United States prosecutors have filed civil money laundering charges against Lloyds TSB Bank and the Bank of Cyprus, alleging the banks allowed hundreds of millions of dollars generated in a securities fraud case to be laundered.
The US attorney's office in Manhattan said the Governmentwas seeking monetary civil penalties of at least US$130 million ($170.5 million) from Lloyds TSB Bank, a unit of Lloyds TSB Group, and at least US$162 million from the Bank of Cyprus.
It alleged the banks had allowed Lycourgos Kyprianou, former chairman of AremisSoft, to launder the money from an alleged securities fraud.
AremisSoft, which was a Nasdaq-listed software company, filed for bankruptcy amid allegations from US authorities of insider trading on a huge scale.
In 2002, a federal grand jury indicted Kyprianou and others on securities fraud, money laundering and conspiracy charges, prosecutors said.
Kyprianou allegedly engaged in an insider trading scheme in which he artificially inflated the price of AremisSoft's stock, used nominee companies to hold and sell the stock and misled the investing public, prosecutors said.
They are also alleging Lloyds TSB Bank and the Bank of Cyprus helped Kyprianou in laundering the proceeds of the alleged AremisSoft fraud through numerous accounts he owned or controlled, after AremisSoft's collapse and the indictment of Kyprianou. Lloyds TSB Bank and Bank of Cyprus could not be reached immediately for comment.
