Bank accused of aiding N. Korea will return to owner

One of the main branches of Banco Delta Asia in Macao.
One of the main branches of Banco Delta Asia in Macao. Tim Johnson, MCT

BEIJING — A tiny bank in Macau that was at the center of stalled talks over North Korea’s nuclear program will be quietly returned to its former owner Saturday, a move that seems to clear him of charges that he helped Pyongyang launder counterfeit U.S. cash.

In a one-paragraph statement, the government in Macau, a former Portuguese colony that's a burgeoning gambling haven, said Banco Delta Asia had shown “remarkable improvement” during two years of government oversight.

It said that Stanley Au, a former gold dealer who ceded control of the bank in September 2005, would be put in charge of the bank again Saturday.

The bank issued a statement quoting Au saying that its return “reflected the exoneration of the bank and clearance of its name as well as its staff from taking part in any illicit activities.”

The return of the bank without any criminal charges is the latest strange twist in the saga of Banco Delta Asia. The family-owned bank was drawn into a political storm two years ago that led to the suspension of nuclear talks with North Korea, adding to the tensions that indirectly prompted Pyongyang to conduct a nuclear test 11 months ago.

U.S. Treasury Department officials claimed that the bank had for two decades abetted North Korean-linked companies and individuals engaged in crime, including drug trafficking and circulating sophisticated counterfeit U.S. bills.

As recently as last March 19, a Treasury Department ruling published in the Federal Register cited Au’s “potential for recidivism” in illegal activities in urging that Macau overseers remain in control of the bank, which has eight branches.

The Bush administration continues to list the bank as a “primary money laundering concern,” and the Treasury Department didn't immediately respond Friday to questions about why concerns over the bank’s alleged past activities may have dissipated.

When the Treasury Department first fingered the bank in 2005, Macau authorities froze some $25 million in North Korean-linked money in some 50 accounts.

In a complex, U.S.-brokered deal in June that was intended to get the nuclear talks back on track, the frozen assets reportedly were transferred to the New York Federal Reserve, then to the Russian central bank and finally to a private Russian bank where North Korea has an account.

Macau made no mention of past allegations in announcing the bank’s return to Au, saying only that its Monetary Authority would perform “supervisory duties to safeguard the interests of depositors and to maintain the stability of the financial system.”

The Banco Delta Asia statement suggested that the bank had become a pawn in a conflict between the United States and North Korea.

“The ‘BDA Affair’ is neither a commercial nor a business dispute. It is a political case and BDA has been unwillingly and unknowingly dragged into the epic center of a political whirlpool,” it said.

In May, the 66-year-old Au sought to regain control of his bank with a sworn statement that included a pledge not to rehire any former employees of the bank who'd prompt objections from the U.S. Treasury Department.

In a sign that Treasury’s allegations against the bank appear to have been withdrawn, Banco Delta Asia appears ready to rehire a number of former employees. In its statement, it listed 12 board members and executive staff who'd return to the bank under Au’s direction. Only three are new.

“The rest have been with us for some time,” bank spokeswoman Eva Hui said, “but they may have had other positions in the past.”

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