"This case offers a stark and disturbing example of the lengths to which some corporate wrongdoers are willing to go in seeking ill-gotten financial gains."

Investigators at the US treasury's Office of Foreign Assets Control (OFAC), said Credit Suisse used elaborate procedures for altering payments to hide their true destination, including stripping out the names of sanctioned parties from payment instructions.

'Egregious case'

According to the treasury and other US agencies involved in the investigation the bank helped facilitate "hundreds of millions of dollars" funnelled in and out of Iran and other countries subject to US sanctions by disguising the transactions.

"The great majority of the transactions involved Iran, although there were also transactions that appear to have violated US sanctions on Sudan, Libya, Burma, Cuba, and the former Liberian regime of Charles Taylor," a treasury statement said.

"This matter represents an egregious case under OFAC's enforcement guidelines due to a number of aggravating factors, including the substantial economic benefit to sanctioned parties, the scope and severity of the apparent violations, and the awareness of the conduct within the bank."

Officials said Credit Suisse had cooperated with US investigators and could have faced an even stiffer penalty if it had refused.

The settlement agreed on Wednesday includes a deferred prosecution agreement that allows the bank to avoid further penalties as long as it steers clear of new violations and cooperates with authorities.