First Merchant Bank (Northern Cyprus)

First Merchant Bank OSH Ltd (FMB) was an offshore bank of Northern Cyprus established in 1993. As an offshore bank it was not regulated by the Central Bank of the Turkish Republic of Northern Cyprus, and not allowed to trade with Northern Cyprus residents.[1] In August 2004 the US Financial Crimes Enforcement Network (FinCEN) designated it "a financial institution of primary money laundering concern" under Section 311 of the Patriot Act.[2][3] The Northern Cyprus Ministry of Finance withdrew FMB's banking license in February 2007, and by April 2008 the bank's Ireland-registered major shareholder and its subsidiaries appeared defunct.[4]

This company is not associated with First Merchants Bank, National Association or First Merchants Corporation located in Muncie, Indiana USA.

Overview

In the wake of the Susurluk scandal, Turkish deputy Fikri Sağlar said that Turkish intelligence official Tarık Ümit, assassinated in 1995, had been a joint shareholder of the FMB with Kayzer Mahmood Butt, the private office manager of Saudi Prince Faisal.[5]

In 2004 the US Financial Crimes Enforcement Network (FinCEN) "found that reasonable grounds exist for concluding that First Merchant Bank is a financial institution of primary money laundering concern." The reasons for this included the bank's involvement in "the marketing and sale of fraudulent financial products and services"[1][6] and that "the individuals who own, control, and operate First Merchant Bank have links with organized crime and apparently have used First Merchant Bank to launder criminal proceeds."[1] FinCEN noted that partners of FMB included "a former KGB employee identified as Vladimir Kobarel", and former Turkish intelligence official Tarık Ümit. FinCEN pointed out links with the Turkish Susurluk scandal, noting that according to press reports, "First Merchant Bank, Tarik Umit, and [Bank President] Dr. Hakki Yaman Namli are alleged to have been involved with the laundering of $450 million in narcotics proceeds for the ``Susurluk gang."[1]

The Northern Cyprus Ministry of Finance withdrew FMB's banking license in February 2007, and by April 2008 the bank's Ireland-registered major shareholder and its subsidiaries appeared defunct.[4]

References
  1. Federal Register, 24 August 2004, DEPARTMENT OF THE TREASURY, 31 CFR Part 103, RIN 1506-AA65, Federal Register Volume 69, Number 163
  2. Federal Deposit Insurance Corporation, 1 September 2004, Financial Institution Letters: FIL-101-2004
  3. US Treasury, 24 August 2004, Treasury Employs USA PATRIOT Act Authorities to Designate Two Foreign Banks as "Primary Money Laundering Concerns"
  4. Federal Register, 10 April 2008, DEPARTMENT OF THE TREASURY, 31 CFR Part 103, RIN 1506-AA89, Federal Register Volume 73, Number 70
  5. Hurriyet Daily News, 28 May 1997, CHP deputy claims alleged Saudi links with Susurluk incident
  6. See also United States Attorney, Southern District of New York, 3 November 2003, U.S. JURY CONVICTS MAN OF FRAUD CHARGES ARISING FROM SALE OF FRAUDULENT $20 MILLION BANK STATEMENT Archived 2010-12-01 at the Wayback Machine
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