WASHINGTON - LLOYDS TSB Group Plc has agreed to forfeit $350 million (S$516.8 million) to US authorities in connection with charges that it faked records so clients from Iran, Sudan and elsewhere could do business with the US banking system.

The actions violated the International Emergency Economic Powers Act, which allows the US president to block commerce with countries deemed a threat to the United States.

The US Justice Department and Manhattan District Attorney said on Friday that London-headquartered Lloyds had agreed to the forfeiture to settle charges stemming from a joint investigation.

'Lloyds' criminal conduct was designed to assist its clients in avoiding detection by filters employed by US 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 US District Court in Washington, D.C.

Lloyds said it had set aside 180 million pounds last year to cover a possible settlement in the US case and it 'does not anticipate any further enforcement actions'.

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

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

'The criminal conduct by Lloyds was designed to evade, and to assist its customers in evading, US economic sanctions imposed against Iran, Sudan and other countries,' it said.

Lloyds had disclosed settlement talks in interim results for the first half of 2008.

'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,' Lloyds said in a statement on Friday. -- THOMSON REUTERS