The Justice Department has launched a criminal probe against a subsidiary of Société Générale that alleged Ponzi schemer R. Allen Stanford funneled money through, based on suspicions that it ignored some fishy transactions, sources tell the Wall Street Journal. A Société Générale spokesman confirmed that the subsidiary, SG Private Banking, “has received requests for documents and other information” from the Justice Department.
The court filing against Stanford alleged that he’d “secretly funneled more than $100 million of investors' money” through the bank and into personal accounts, using it “for the payment of bribes and lavish personal expenditures.” But until now the bank wasn’t thought to be under suspicion, because “at that level, prosecutions are reserved for the bad actor,” one white collar defense lawyer explains, “unless you are prepared to say that the bank has a systemic problem and is corrupt at its core.” (More Societe Generale stories.)
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