Peter Herrington, who was named in a US Senate investigation into money laundering, is a former senior member of staff at the Bank of Bermuda, The Royal Gazette has learned.

Herrington is accused in the report of using "influence'' on staff at the Bank of Bermuda to get them to accept bundles of cash believed to belong to criminals.

Herrington is also named as the disgraced General Manager of Swiss American Banking Group and is a central figure in the US Senate report on the laundering of $7 million, said to be linked to the Irish Republican Army (IRA) and the drugs trade.

Of that $7 million, the documents from the probe appear to indicate that 85 percent ($5.95 million) was laundered through the Bank of Bermuda. Documentary evidence also has information from Special Branch division of the Bermuda Police Service who looked into the matter.

Herrington worked at the Bank of Bermuda in Hamilton for several years in senior positions in the early 1980s before moving to the Cayman Islands to take up the top job with the Swiss American Banking Group.

He is closely linked with the central character in part of the Senate investigation, John Fitzgerald, who was convicted of racketeering conspiracy and money laundering in the United States in connection with the $7 million of mob money.

The Minority Staff of the US Senate Permanent Sub-committee on Investigations report on Correspondent Banking: A Gateway to Money Laundering revealed this week that: "In October 1995, Herrington used Swiss American's relationship with the Bank of Bermuda to influence staff there to accept the cash deposit.'' The report also states: "The General Manager of the Swiss American Banking Group was at the time Peter Herrington who assisted Fitzgerald with the formation of all IBCs (a type of share-owned corporation) and management of the accounts at SAB (Swiss American Bank) and SANB (Swiss American National Bank). The formation of the accounts was handled by Antigua International Trust. Herrington served as director of all the IBCs and Guardian Bank and performed transactions in the SAB and SANB accounts.'' Continued in Business Page 14 Disgraced banker has Island past Swiss American Banking Group is owned by financier Bruce Rappaport, a former Bermuda resident who is believed to have held millions of dollars in Bank of Bermuda accounts during the 1980s.

Herrington was suspended and then sacked from his job in Swiss American in 1987 when he refused to tell Rappaport who ran the accounts.

The report said: "Between the time of Herrington's suspension and his termination, he notified Fitzgerald of Rappaport's concerns.'' According to a Bermuda Police Special Branch report extract in the published Senate report, the sum of $450,000 in cash was believed to have been taken out of a Bank of Butterfield safety deposit box, and taken in cash to the Bank of Bermuda, where it was deposited with Herrington using the "influence'' of the Antiguan bank.

The report goes on to state: "When the funds were transferred to the account at Swiss American, they were `held' until Herrington made the book entries.'' There is a further mention in the Special Branch report of $5 million, which they say was put through a wire transfer to Bank of Bermuda and on to Swiss American Bank.

The Bermuda Police said it was a "murky trail''. It said: "Between January and March 1985, Fitzgerald and other members of the drug organisation deposited $3 million into the account (in the Canadian Imperial Bank of Commerce, St. Lucia). In May 1995, the account was closed and all of the funds (in excess of $3 million), were transferred to Guinness Marn and Company Bank in the Cayman Islands through a bank cheque issued to the Guinness Bank.

"The total in the account subsequently grew to $5 million. In the fall of 1985, the $5 million in funds were wire transferred from the Guinness Bank account to Philadelphia to Manufacturers Hanover Bank in New York to the Bank of Bermuda and on to Swiss American Bank.'' The Special Branch report also states: "Another $500,000 came through a cash deposit at the Bank of Bermuda''. It is not clear if this is a separate amount to the $450,000 mentioned earlier in the same report.

The extracts are from the section of the report called The Fitzgerald Case -- Drugs and Terrorist Money which repeatedly puts Herrington and Swiss American Banking Group at the centre of the scandal.

While living in Bermuda, Herrington is believed to have worked closely with Barry Shailer, now Chief Compliance Officer at the Bank of Bermuda, and the then chief executive officer Donald Lines, who helped set up Lines Overseas Management.

Herrington, who for some time held the position of assistant manager, corporate banking, legal and secretary was then given the additional responsibility in mid 1983 for the Bank of Bermuda's corporate loans and letters of credit facilities under the direction of Barry Shailer, who was at the time manager of corporate banking.

Mr. Shailer and Mr. Herrington have been described as "the best of friends'' by colleagues who said Herrington "lived the life of Riley'' while in Cayman with his own beach-front property, tennis courts and a chauffeur. It is not known where Herrington currently resides.

The Bank of Bermuda was contacted on Friday with a list of questions about Mr.

Herrington. The questions included how long he worked at the Bank, what positions he held, how he came to be employed by the Bank and why he left.

They also included a question on whether Herrington had any connections with the Bank after leaving.

As of press time, the Bank of Bermuda had not responded to the questions.

Anyone with knowledge or information on Mr. Herrington is asked to contact Mairi Mallon at 295-5881, extension 247.

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