Spanish unit of Andorra bank files for bankruptcy protection

A man speaks to a security guard standing behind a closed door of a Banco de Madrid office in Madrid, Spain, Monday, March 16, 2015. Government-appointed administrators running the Spanish unit of an Andorran bank accused of money laundering say they have suspended its operations and filed for bankruptcy protection. Spain's central bank says a crush of withdrawals by clients of Banco de Madrid SA prompted the request to a judge for bankruptcy protection. The bank caters to wealthy clients and is owned by Banca Privada d'Andorra, which was named a "primary money-laundering concern" by the U.S. Treasury Department last week. (AP Photo/Paul White) A man speaks to a security guard standing behind a closed door of a Banco de Madrid office in Madrid, Spain, Monday, March 16, 2015. Government-appointed administrators running the Spanish unit of an Andorran bank accused of money laundering say they have suspended its operations and filed for bankruptcy protection. Spain's central bank says a crush of withdrawals by clients of Banco de Madrid SA prompted the request to a judge for bankruptcy protection. The bank caters to wealthy clients and is owned by Banca Privada d'Andorra, which was named a "primary money-laundering concern" by the U.S. Treasury Department last week. (AP Photo/Paul White)

By Associated Press March 16, 2015 2 min read

MADRID (AP) – A rush of withdrawals by clients of the Spanish unit of an Andorran bank accused of money laundering prompted government administrators to seek bankruptcy protection for the unit and the suspension of its operations, Spain’s central bank said Monday.

Banco de Madrid SA needs the protection to be granted by a judge following a “sharp deterioration” of its finances because of “large withdrawals of clients funds” after its parent company in Andorra was accused last week by the U.S. of helping groups from China, Russia and Venezuela launder money, the central bank said in a statement.

Banco de Madrid’s owner, Banca Privada d’Andorra, was named a “primary money-laundering concern” by the U.S. Treasury Department. After that happened, Andorra took over the parent company and officials from Spain and Panama took over the bank’s Spanish and Panamanian divisions.

Also Monday, an Andorran police official said the chief executive officer of Banca Privada d’Andorra was taken to appear before a judge Sunday night after being arrested Friday on suspicion of money laundering. The official spoke on condition of anonymity because of department policy.

Officials at Andorra’s court said Monday that they had been instructed to give no information on what happened at the appearance of CEO Joan Pau Miquel Prats and also declined comment on whether he had been released from custody or not.