Spain takes over unit of Andorra bank in laundering probe

Staff Writer
Columbus CEO

MADRID (AP) — Spain's central bank has taken over a bank that caters to the rich following accusations by the United States that its Andorran owner was involved in laundering money for criminal groups from China, Russia and Venezuela.

The Bank of Spain said in a statement late Tuesday that it has put two employees in charge of Banco de Madrid SA, which has 23 branches around the country and is owned by Banca Privada d'Andorra.

The central bank said it made the decision after the U.S. Treasury Department's financial crimes enforcement network named BPA as a foreign financial institution "of primary money-laundering concern."

Following the U.S. declaration, Andorra's government intervened in BPA, putting two controllers in charge of the bank while insisting that the bank's deposits and solvency are not at risk.

The Treasury Department said one unnamed high-level BPA manager accepted "exorbitant commissions" to develop shell companies that helped Venezuelan money launderers siphon about $2 billion from Venezuela's national oil company, Petroleos de Venezuela SA.

Two other BPA managers helped alleged Russian and Chinese money launderers who were previously arrested in Spain, the department said in a statement. The Chinese man, Gao Ping, also stands accused of money laundering for "numerous" Spanish business owners.

The unnamed BPA managers are said to have accessed the U.S. financial system via four U.S. banks that were not named, processing hundreds of millions of dollars.

BPA did not immediately respond Wednesday to a message left at the bank seeking comment.

Tiny Andorra, which has a population of 85,000, is wedged between Spain and France in the Pyrenees mountains. It is known mainly as a destination for skiing, shopping and banking.