Amex investigated over suspicious activity
NEW YORK – American Express has set aside a $60 million reserve for possible legal action against its Florida-based operation, which is under investigation by the US Justice Department for suspicious transactions in some customer accounts.
The American Express Bank International arm received subpoenas in 2004 relating to dubious customer activity and anti-money laundering compliance programmes.
The funds are to be kept in reserve for legal and regulatory matters pertaining to the federal investigation, after the Miami business was informed in September 2006 of concerns that action could be taken.
The reserve was established in the first quarter, and the Miami unit has been cooperating with investigators, Amex has confirmed.
The credit card giant also announced that it could receive a $65 million tax refund if it settles with the Internal Revenue Service over when to recognise certain revenue for tax purposes. The company said a settlement is "reasonably possible" within the next 12 months.
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