Banco Madrid files for bankruptcy in wake of parent’s trade-based money laundering findings

Banco Madrid of Spain has filed for bankruptcy in the wake of a run on the bank sparked by a money laundering investigation into its parent company, Banca Privada de Andorra (BPA).

Earlier this month, the US Treasury’s Financial Crimes Enforcement Network (FinCen) said BPA was involved in various types of trade-based money laundering, (AML Newsflow, 11 March 2015).

Doors locked
Banco Madrid has locked its doors on its relatively small base of 14,000 clients, as it was revealed that it had ceased all financial operations and requested a creditors’ meeting.

A statement posted on the bank’s head office door in Madrid said the closure was due to a “heavy deterioration of the financial situation of Banco Madrid as a consequence of the large withdrawals of funds by clients and due to recent events which have affected its ability to fulfil its obligations in a timely way”.

Primary money-laundering concern
The crisis was sparked by an investigation, across the border in the tiny state of Andorra, into BPA, which owns Banco Madrid.

On 10 March 2015, FinCen said BPA was “of primary money-laundering concern”, and said it employed various money laundering techniques, including “false contracts, mischaracterised loans, over- and under-invoicing and other trade-based money laundering schemes.”



Categories: Trade Based Financial crimes News

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