Global banks defy US crackdowns by serving oligarchs, criminals and terrorists: ICIJ
The leaked documents, known as the FinCEN Files, include more than 2,100 suspicious activity reports filed by banks and other financial firms
Global money laundering crackdown failed to curb suspect dealings as secret US government documents reveal that big banks including JPMorgan Chase and HSBC moved staggering sums of illicit cash for shadowy characters and criminal networks that have spread chaos and undermined democracy around the world.
Banks moved money for people or entities they couldn't identify, and in many cases failed to file the required suspicious activity reports until years afterward, according to an investigation released over the weekend by the International Consortium of Investigative Journalists (ICIJ).
The report, based on leaked documents obtained by BuzzFeed News and shared with the consortium, said that in some cases the banks kept moving illicit funds after receiving warnings from US officials.
Keep updated, follow The Business Standard's Google news channel
The records show that five global banks — JPMorgan, HSBC, Standard Chartered Bank, Deutsche Bank and Bank of New York Mellon — kept profiting from powerful and dangerous players even after US authorities fined these financial institutions for earlier failures to stem flows of dirty money.
The documents revealed Sunday shed light on a faulty system where banks complain about reports that get no follow-up from authorities, while critics say lenders are checking off boxes without taking meaningful steps to stop financial crime. It all risks another black eye for major international banks that paid a total of $20 billion from 2012 through 2015 for having lax controls against money laundering, helping clients evade taxes or violating US sanctions.
The documents the ICIJ obtained identified more than $2 trillion in transactions between 1999 and 2017 that were flagged by financial institutions' internal compliance officers as possible money laundering or other criminal activity, the report said.
The top two banks are Deutsche Bank AG, which disclosed $1.3 trillion of suspicious money in the files, and JPMorgan Chase & Co., which disclosed $514 billion, the analysis found.
Also Read
- Big banking leak shows HSBC and some others moved scam millions
- Everything you need to know about leak documents of FinCEN files
- HSBC HK shares drop to lowest since 1995, StanChart falls after 'FinCEN' leak
The investigation was based on more than 2,100 "suspicious activity reports" filed by banks with the US Department of Treasury's Financial Crimes Enforcement Network. The report, dubbed the FinCEN Files, was the result of an investigation by more than 100 news organizations in 88 countries, Buzzfeed said.
US agencies responsible for enforcing money laundering laws rarely prosecute megabanks that break the law, and the actions authorities do take barely ripple the flood of plundered money that washes through the international financial system.
In some cases the banks kept moving illicit funds even after US officials warned them they'd face criminal prosecutions if they didn't stop doing business with mobsters, fraudsters or corrupt regimes.
One example was highlighted in the report: JPMorgan moved more than $1 billion for the fugitive financier behind Malaysia's 1MDB scandal, based on records. The bank also processed payments for Paul Manafort, the former campaign manager for President Donald Trump, after he resigned from the campaign amid money laundering and corruption allegations from his work with a pro-Russian political party in Ukraine, according to the investigation.
JPMorgan told ICIJ that it was legally prohibited from discussing clients or transactions. It said it has taken a "leadership role" in pursuing "proactive intelligence-led investigations."
