REUTERS- MARCH 22, 2018- FRANKFURT- Malta’s regulators have imposed a freeze on the business of Pilatus Bank after its chairman’s arrest on charges of breaking U.S. sanctions prompted a fresh wave of criticism of the island’s authorities.

Earlier this week, the bank’s chairman Ali Sadr Hashemi Nejad, 38, was accused in an indictment filed in a federal court in Manhattan of involvement in a scheme to evade U.S. economic sanctions against Iran, prosecutors have said.

Sadr was arrested on Monday, according to court papers. A lawyer for Sadr has declined to comment.

That prompted criticism of the Maltese authorities for inaction, including from the children of a journalist murdered in Malta last year. Daphne Caruana Galizia had reported on corruption and accused Pilatus of money laundering.

Some lawmakers had also questioned whether Pilatus Bank, which is registered in Malta, should keep its license.

The developments prompted new protests by anti-corruption activists outside the bank’s headquarters near the capital of Valletta, who placed a washing machine on a plaque marking the opening of Pilatus Bank by Prime Minister Joseph Muscat.

Malta’s police said the alleged sanctions busting did not involve Maltese citizens or institutions and that no transactions passed through Malta.

Malta’s financial supervisors nonetheless responded by imposing controls on Pilatus that effectively freezes the bank’s business.

“The bank has been directed not to transact any business whatsoever,” the Malta Financial Service Authority said in a statement, adding this applied to “all deposits and withdrawals and any disposal of the bank’s assets.”