Credit Suisse Group has agreed to pay $536 million to settle a Justice Department probe and admit to violating U.S. economic sanctions by hiding the booming illegal business it was doing for Iranian banks.

The Justice Department announced the settlement Wednesday, saying it was the biggest forfeiture ever against a company for violations of that type.

"Credit Suisse's decades-long scheme to flout the rules that govern our financial institutions robbed our system of the legitimacy that is fundamental to its success," Attorney General Eric Holder said at a news conference at department headquarters. "We cannot let this stand, and today's settlement sends a strong message that we will not let it stand."

The $536 million that Credit Suisse is forfeiting will be split between the U.S. government and the district attorney's office in Manhattan, which also participated in the settlement talks with the bank along with the Federal Reserve and the Treasury Department.

The U.S. officials said the government is continuing to investigate the handling of Iranian funds by big banks in the West. All payments made in dollars must be processed through banks or bank offices in the U.S., subjecting the transactions to U.S. laws even if the parties are abroad.

Altogether, about $1.6 billion in transactions flowing from Iran were involved, the officials said. They said there was no evidence of any of the money going to missile development programs or terrorist organizations. But the Manhattan prosecutors said a handful of the entities involved subsequently made the U.S. government's list of contributors to weapons proliferation, after the bank had decided to stop its sanctions-skirting business.

"If they're doing business with a country like Iran and hiding Iran in their transactions, they're running a tremendous risk that either now or in the future, their transactions are going to link into something bad," said Adam Kaufmann, a Manhattan assistant district attorney.

Lanny Breuer, the assistant attorney general who heads the Justice Department's criminal division, said the government's action sends a message to banks that they should come forward to the authorities if misconduct is being committed — "before we come knocking on your door."

"I hope that other financial institutions are watching and learning from Credit Suisse's experience," he said at the Washington news conference.

Zurich-based Credit Suisse swiftly cooperated with the authorities, the U.S. officials said, and therefore the Justice Department is recommending the termination of the enforcement action in two years if the bank complies with the settlement terms.

The bank, one of Switzerland's largest, has been under criminal investigation for years over business it did with countries subject to U.S. economic sanctions.

The settlement papers maintain that the bank had a long-running practice of helping Iranian banks evade the sanctions by hiding the identity of their Iranian customers in international money transactions.

"Credit Suisse's internal communications showed a continuous dialogue about evading U.S. sanctions spanning approximately a decade," the government's papers say.

Earlier this year, Lloyds TSB Bank PLC agreed to forfeit $350 million for helping customers skirt U.S. sanctions on business transactions with Sudan, Iran and Libya.

The court papers filed Wednesday say that when Lloyds decided in 2003 to stop doing such business, the Iranian banks moved their business over to Credit Suisse.

As a result, Credit Suisse quadrupled the number of Iranian transactions in U.S. dollars between the years 2002 and 2005, from about 50,000 to about 200,000.

U.S. authorities also said Credit Suisse handled a far smaller number of transactions involving other countries facing sanctions, including Libya, Sudan, and Burma.

The bank began winding down their sanction-evading business in 2006, the government said.

"Credit Suisse is committed to the highest standards of integrity and regulatory compliance in all its businesses and takes this matter extremely seriously," the bank said in a statement Wednesday.

It said it had undertaken a review of some U.S. dollar payments that involved countries, people or entities subject to sanctions.

The Manhattan prosecutors, at a separate news conference, said Credit Suisse stripped out references to Iran from electronic messages directing payments. Credit Suisse sometimes substituted abbreviations or the phrase "one of our customers" for Iranian clients' names, they said. The changes were designed to slip the payments past filters U.S. banks use to block Iran-related transactions.

The bank is said to have used such tactics from the 1990s through 2006, processing more than $700 million in payments that violated U.S. sanctions.