By Robb M. Stewart 

MELBOURNE, Australia--Australian police have charged a former executive at the nation's largest bank with bribery, alleging he and a colleague received payments in return for giving a lucrative technology contract to a U.S.-based company.

The man was charged with two counts of bribery and was refused bail, New South Wales state police said in a statement Wednesday. The police didn't disclose the name of the man or the U.S. company.

Working with the U.S. Federal Bureau of Investigation, the department's fraud and cybercrime squad has frozen more than US$1.5 million in alleged corrupt payments during its ongoing investigation.

The police said they wanted to speak with another of the bank's former senior IT managers who is currently out of the country. They didn't say whether they intended to press charges against him.

Commonwealth Bank of Australia, the country's biggest lender by market value, confirmed that a former executive had appeared before a Sydney court Wednesday.

"We have no tolerance for any illegal activity by any employee and we take every situation seriously," a spokeswoman for the bank said, adding that no customers had been affected by the matter.

The 61-year-old American man was arrested Tuesday at a residence in Sydney's Surry Hills suburb, according to police. They said they were alerted to the alleged misconduct early this year by the bank following an internal investigation that had uncovered suspicious payments to two of its employees, both U.S. nationals.

Commonwealth Bank confirmed it had reported the matter to the police and was cooperating with the investigation. The spokeswoman declined to comment further while the matter was before the court.

Police detectives said they would argue in court that both former employees were involved in a corrupt relationship with the U.S.-based technology company, which is now publicly listed.

Write to Robb M. Stewart at robb.stewart@wsj.com

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