Magazine article American Banker

Troubled Lavoro Closing Its Branch in Atlanta as U.S. Probe Winds Up

Magazine article American Banker

Troubled Lavoro Closing Its Branch in Atlanta as U.S. Probe Winds Up

Article excerpt

The Banca Nazionale del Lavoro is closing its Atlanta branch nearly. five years after federal investigators raided that office to uncover one of banking's biggest scandals.

A spokesman for the bank in New York confirmed that the Atlanta branch will be closed by the end of the month, with its few remaining assets transferred to New York.

Two of the eight employees will be transferred to other Layoro offices in the U.S. and the rest will be laid off, the official said.

Meanwhile, the Justice Department appears to have reached the end of its probe into billions of unauthorized loans to Iraq that Lavoro's Atlanta branch made in the late 1980s.

Justice Department spokesman John Russell said the agency has completed its final report. The findings are being reviewed internally at the Justice Department before their release in the next month or two.

A Plea Bargain

Federal prosecutors in Atlanta subsequently reduced the original 347-count indictment against former Lavoro branch manager Christopher P. Drogoul to three narrowly drawn charges.

Mr. Drogoul pleaded guilty to the charges in December and was sentenced to 37 months in jail. He is expected to serve less than a year.

Lavoro's Atlanta branch had been a low-profile trade finance operation until the FBI raid on Aug. 4, 1989.

When Mr. Drogoul's "unauthorized" Iraqi loans were officially put on the books in 1990, total assets of the Atlanta agency ballooned 20-fold to $2.2 billion, making it the sixth-largest bank in Georgia at the time. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.