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Debra Wong Yang
United States Attorney
Central District of California


United States Courthouse
312 North Spring Street
Los Angeles, California 90012
Release No. 06-097

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PRESS RELEASE

FOR IMMEDIATE RELEASE
July 24, 2006
For Information, Contact Public Affairs
Thom Mrozek (213) 894-6947

FORMER MANAGING DIRECTOR OF CREDIT LYONNAIS INVESTMENT BANKING SUBSIDIARY PLEADS GUILTY TO CAUSING BANK TO FILE FALSE STATEMENTS WITH THE FED


Los Angeles, CA - A former managing director of Altus Finance S.A., which was an investment banking subsidiary of the French bank Credit Lyonnais, pleaded guilty this morning to four felony charges of causing Credit Lyonnais to make false statements to the Federal Reserve Bank.

Jean-Francois Henin, 62, of Paris, appeared today in United States District Court in Los Angeles and entered guilty pleas to four criminal counts which allege that he caused Credit Lyonnais to make false statements to the Board of Governors of the Federal Reserve System. Immediately following the entry of his guilty pleas, United States District Judge Dickran Tevrizian sentenced Henin to pay a $1 million criminal fine, to serve five years of probation and to be banished from the United States for five years.

The charges against Henin are part of a larger criminal and regulatory investigation involving the takeover of the Executive Life Insurance Company, which was once the largest life insurance company in California. In 1991, Executive Life was declared insolvent and was seized by the California Department of Insurance. As part of the rehabilitation of Executive Life, both its insurance business and its "junk" bond portfolio were put up for sale. Credit Lyonnais, through Altus, orchestrated a scheme in which it obtained Executive Life's bond portfolio, and used secret "parking" agreements referred to in French as portage agreements to illegally gain control of Aurora National Life Assurance Company, a newly formed California life insurance company that acquired the restructured Executive Life insurance business. These secret portage agreements, and Credit Lyonnais' resulting illegal control of the insurance business, remained concealed until the fraud came to light in the summer of 1998 when a whistleblower alerted California authorities of their existence.

In December 2003, a federal grand jury in Los Angeles indicted six French nationals, including Henin, on various criminal charges for their role in a conspiracy to illegally acquire the assets of the bankrupt Executive Life.

In January and February of 2004, five defendants pleaded guilty to multiple felony charges. These defendants Credit Lyonnais; CDR-Entreprises S.A., as the successor in interest to Altus; MAAF Assurances S.A., a major French mutual insurance company; Jean-Claude Seys, the Chairman of MAAF; and Dominique Bazy, a former member of Credit Lyonnais' executive committee along with Artemis S.A., a holding company controlled by French businessman Francois Pinault, paid a total of $770.75 million in fines, penalties and restitution-type payments to establish victim compensation funds. Another defendant, Eric Berloty, who had worked as a consultant for Altus, entered a guilty plea in June 2004. Jean Peyrelevade, a former chairman of Credit Lyonnais, pleaded guilty to two felony charges in January 2006 and was ordered to pay a $500,000 criminal fine. Two other defendants Jean-Yves Haberer and Francois Gille are fugitives who are believed to be residing in France.

This case is the result of an investigation by the Federal Bureau of Investigation, acting in coordination with the Board of Governors of the Federal Reserve System and the Federal Reserve Bank of New York.

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Release No. 06-097

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