First Merchant Bank OSH Ltd (FMB) was an

offshore bank An offshore bank is a bank that is operated and regulated under international banking license (often called offshore license), which usually prohibits the bank from establishing any business activities in the jurisdiction of establishment. Due to ...

Northern Cyprus Northern Cyprus, officially the Turkish Republic of Northern Cyprus (TRNC), is a ''de facto'' state that comprises the northeastern portion of the Geography of Cyprus, island of Cyprus. It is List of states with limited recognition, recognis ...

established in 1993. As an offshore bank it was not regulated by the

Central Bank of the Turkish Republic of Northern Cyprus The Central Bank of the Turkish Republic of Northern Cyprus (), is the central bank of Northern Cyprus. It was established on 16 May 1983. Northern Cyprus uses the Turkish lira as currency and the main central banking functions are provided by t ...

, and not allowed to trade with Northern Cyprus residents.''

Federal Register The ''Federal Register'' (FR or sometimes Fed. Reg.) is the government gazette, official journal of the federal government of the United States that contains government agency rules, proposed rules, and public notices. It is published every wee ...

'', 24 August 2004
DEPARTMENT OF THE TREASURY, 31 CFR Part 103, RIN 1506-AA65
Federal Register Volume 69, Number 163 In August 2004 the US

Financial Crimes Enforcement Network The Financial Crimes Enforcement Network (FinCEN) is a bureau within the United States Department of the Treasury that collects and analyzes information about financial transactions to combat domestic and international money laundering, terrori ...

(FinCEN) designated it "a financial institution of primary

money laundering Money laundering is the process of illegally concealing the origin of money obtained from illicit activities (often known as dirty money) such as drug trafficking, sex work, terrorism, corruption, and embezzlement, and converting the funds i ...

concern" under Section 311 of the Patriot Act. The Northern Cyprus Ministry of Finance withdrew FMB's banking license in February 2007, and by April 2008 the bank's Ireland-registered major shareholder and its subsidiaries appeared defunct.''

'', 10 April 2008
DEPARTMENT OF THE TREASURY, 31 CFR Part 103, RIN 1506-AA89
Federal Register Volume 73, Number 70 This company is not associated with First Merchants Bank, National Association or First Merchants Corporation located in

Muncie, Indiana Muncie ( ) is a city in Delaware County, Indiana, United States, and its county seat. It is located in East Central Indiana about northeast of Indianapolis. At the 2020 census, the city's population was 65,195, down from 70,085 in the 2010 c ...

USA.

Overview

In the wake of the

Susurluk scandal The Susurluk scandal () or Susurluk accident (), was a 1996 political scandal in Turkey that exposed a close relationship between the Turkish government, the ultra-nationalistic paramilitary Grey Wolves (organization), Grey Wolves organization an ...

, Turkish deputy

Fikri Sağlar Fikri Sağlar (born 1953) is a Turkish social democrat politician. He was Minister of Culture in the early 1990s, and a member of the parliamentary commission which investigated the Susurluk scandal. He has been a columnist for ''Birgün''. In ...

said that Turkish intelligence official

Tarık Ümit Tarık Ümit (22 April 1947 in Düzce – 3 March 1995 in Marmaris) was a Turkish intelligence official in the National Intelligence Organization (MIT). He was kidnapped and murdered in March 1995. Career After his father died, Ümit went to live ...

, assassinated in 1995, had been a joint shareholder of the FMB with Kayzer Mahmood Butt, the private office manager of Saudi Prince Faisal. In 2004 the US

(FinCEN) "found that reasonable grounds exist for concluding that First Merchant Bank is a financial institution of primary money laundering concern." The reasons for this included the bank's involvement in "the marketing and sale of fraudulent financial products and services"See also United States Attorney, Southern District of New York, 3 November 2003
U.S. JURY CONVICTS MAN OF FRAUD CHARGES ARISING FROM SALE OF FRAUDULENT $20 MILLION BANK STATEMENT
{{Webarchive, url=https://web.archive.org/web/20101201012027/http://www.justice.gov/usao/nys/pressreleases/November03/jarsonrelease.pdf , date=2010-12-01 and that "the individuals who own, control, and operate First Merchant Bank have links with organized crime and apparently have used First Merchant Bank to launder criminal proceeds." FinCEN noted that partners of FMB included "a former KGB employee identified as Vladimir Kobarel", and former Turkish intelligence official

. FinCEN pointed out links with the Turkish

, noting that according to press reports, "First Merchant Bank, Tarik Umit, and ank PresidentDr. Hakki Yaman Namli are alleged to have been involved with the laundering of $450 million in narcotics proceeds for the ''Susurluk gang.''" The Northern Cyprus Ministry of Finance withdrew FMB's banking license in February 2007, and by April 2008 the bank's Ireland-registered major shareholder and its subsidiaries appeared defunct.

References

Defunct banks of Turkey Banks of Northern Cyprus Banks established in 1993 Banks disestablished in 2007 2007 disestablishments in Turkey Turkish companies established in 1993