The chief executive of Andorran lender Banca Privada d'Andorra (BPA), who was suspended along with the rest of the board last week, was arrested overnight on suspicion of money laundering, a police spokesman from the principality said on Saturday.
Joan Pau Miquel had been running the bank until financial authorities in Andorra dismissed the board of directors and three managers on Thursday amid a money laundering investigation.
Reuters was unable to reach BPA for a comment or to obtain a comment from Miquel.
Andorra seized control of privately-owned BPA this week as it investigates U.S. allegations of money laundering, and replaced executives with provisional administrators.
The tiny principality in the Pyrenees mountains between Spain and France, which relies heavily on its banking sector, said BPA was an isolated case and that allegations were limited to one bank.
BPA also has a subsidiary in Spain, Banco Madrid. The unit was not named by the U.S. Financial Crimes Enforcement Network (FinCen) in its allegations.
Spain's money laundering watchdog, SEPBLAC, has asked anti-corruption prosecutors to launch a probe into the bank, two sources with knowledge of the case said late on Friday.
Prosecutors will now have to decide whether there are grounds for an investigation. SEPBLAC and Spain's Economy Ministry, under whose remit the watchdog falls, declined to comment.
The Treasury Ministry could open a tax probe into BPA and Banco Madrid as well, a source there said this week. Banco Madrid also has new managers, who were appointed by the Bank of Spain after its board resigned this week.
