INTERVENTION OF BANCO DE MADRID

On 10 March, the Bank of Spain took control of Banco de Madrid, a subsidiary of Banca Privada d'Andorra since 2011. The event took place after the investigation launched by the U.S. Treasury Department’s Financial Crimes Enforcement Network, which named Banca Privada d'Andorra a primary money-laundering concern for organized crime, corruption and human trafficking.

The Andorran authorities took over the running of the bank on the basis of the U.S. allegations, and arrested the director general of Banca Privada d'Andorra, Joan Pau Miquel Prats, and two other bank officials.

Banco de Madrid began bankruptcy proceedings after customers rushed to empty accounts in the wake of events. However, the Bank of Spain has decided not to bail out Banco de Madrid.

Spanish authorities are separately investigating substantial assets held at the Banca Privada d'Andorra by members of the family of Jordi Pujol, a Spanish politician, former leader of a political party and President of the Generalitat of Catalonia. Through Banco de Madrid, Banca Privada d'Andorra was responsible for laundering more than 3 million euros from the legacy of Florenci Pujol, father of Jordi Pujol. He admitted to concealing large sums of money in secret foreign bank accounts and to failing to report the money to the tax authorities “over a period of more than 30 years.”