Britain investigates alleged Nigerian money laundering

LONDON, England (Reuters) -- A British agency said Tuesday it is investigating the role played by London banks in the alleged laundering of some of the $3 billion looted by late Nigerian dictator Sani Abacha.

The announcement by the Financial Services Authority came amid growing criticism that money laundering controls had failed to block the flow of illicit Nigerian funds.

"We are taking these matters extremely seriously," the FSA said. "Working with the criminal authorities here, we are conducting a comprehensive investigation to identify any banks with possible links to these funds."

The FSA said it wanted to know exactly how the funds were handled. This included whether banks complied with anti-money laundering controls and whether they took sufficient steps to identify the origin of the funds.

It added in a statement: "If during the course of this we find evidence of criminal activity, we'll pass that on to the relevant criminal prosecution authorities."

Britain's Serious Fraud Office, which is expected to play a leading role in the investigation, said it was in talks with the Home Office (interior ministry) on the matter.

The Home Office said it was examining a request for legal assistance in tracking down funds from the Nigerian government of Olusegun Obasanjo, who succeeded Abacha.

"There has been a request from Nigeria," a Home Office spokesman said. "We are going through the process of scrutiny and assessment."

Last month Swiss authorities temporarily froze $660 million in Abacha family funds in a case that involved transfers to and from banks in Britain, the United States, Austria and Liechtenstein.

The Swiss Banking Commission reprimanded 12 banks in Switzerland for their lax handling of Abacha funds but did not file criminal charges against any bankers.

Nigeria suspects Abacha embezzled and stashed abroad some $3 billion in looted state funds before he died in June 1998.

British media have said that the London offices of 15 banks are involved.

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