Reuters reported this from Washington DC today:

Lloyds TSB has agreed to forfeit $350 million (£231 million) to U.S. authorities in connection with charges it faked records so clients from Iran, Sudan and elsewhere could do business with the U.S. banking system. The actions violated the International Emergency Economic Powers Act, which allows the U.S. president to block commerce with countries deemed a threat to the United States.

"Lloyds' criminal conduct was designed to assist its clients in avoiding detection by filters employed by U.S. banks because of United States economic sanctions against Iran, Sudan and Libya," said a fact sheet on a deferred prosecution agreement between the government and Lloyds that was filed in U.S. District Court in Washington, D.C.

The U.S. Justice Department said that, from 1995 to 2007, Lloyds' offices in Britain and Dubai removed information such as customer names, bank names and addresses so wire transfers would not be flagged and blocked as improper by U.S. financial institutions.

"This process of 'repairing' or 'stripping' ... allowed more than $350 million in transactions to be processed by U.S. correspondent banks that might have otherwise been blocked or rejected," the department said in a statement.

Most of that was money sent from overseas and into the United States, said Matthew Friedrich, acting assistant attorney general for the criminal division.

The stripping allowed about $300 million to be sent between the United States and Libya, about $21 million between the United States and Sudan and about $20 million between Libya and the United States without scrutiny to ensure it was legal.

In response Lloyds is reported to have said

"We are committed to running our business with the highest levels of integrity and regulatory compliance across all of our operations and have undertaken a range of significant steps to further enhance our compliance programs"

Let's not beat about the bush here. Lloyds clearly knew what it was doing in this case. It was systematically breaking the law. It did so for 12 year during which time large numbers of people in that organisation knew why they were taking the actions they did.

This does not suggest this was a random act. Nor does it suggest it was a mistake. Nor was it undertaken by a rogue individual. This is indicative of an organisation that knowingly set out to break the law and condoned that action on the part of a large number of employees acting on its behalf. That could only have happened with sanction at very high level.

The conclusion is obvious: this was not a system error. This is clear indication of systemic corruption within this bank.

I've said this before of Lloyds TSB. I've also said it of Barclays, RBS, HBOS and HSBC. We know they have all systemically ignored reporting their clients in the UK Crown Dependencies who have refused to exchange information with the UK tax authorities to the appropriate money laundering authorities on grounds of suspected tax evasion (the only likely justification for such non-disclsoure, to which they have, criminally turned a blind eye) and now we have further evidence of the criminal conduct of one of this group.

We really do have to sweep aside those who ran these banks and replace them with those who might understand the obligations to the societies which give them their licence to operate. It's not much to ask, but will we get a response from the Treasury, now the biggest shareholder in this bank? I hope so, but I won't hold my breath.