- Leaked documents from the Financial Crimes Enforcement Network (FINSEN) were shared with news outlets.
- They show that big banks have been engaged with dirty money for years with little oversight.
- Named banks include JPMorgan Chase, HSBC, Barclays and Dutsch Bank.
- Here are some of the biggest takeaways from this scam.
- Visit Business Insider’s homepage for more stories.
Thousands of leaked documents shared with reporters have shown how some of the world’s largest banks have facilitated the flow of dirty money over the years.
The documents were published on Sunday by BuzzFeed News and the international consortium Investig f Investigative Journalists, as part of a collection of files linked to the Financial Crimes Enforcement Network.
Finsen is tasked with compiling “suspicious activity reports” sent to it by banks that suspect financial irregularities by its customers. SARS does not create evidence of malpractice, but it is a way to warn regulators and law enforcement.
The documents are shared with law-enforcement and financial-intelligence groups around the world. The agency does not require banks to stop dealing with customers who ask SIR.
The BuzzFeed News and ICIJ report states that banks, including JPMorgan Chase, HSBC and Deutsche Bank, have been involved in and facilitated criminal money movements even after raising suspicions.
Detailed movement and transaction of files began in about two decades, in 2000 and continued until 2017.
Here are some of the biggest revelations from the bombshell report:
5 banks processed more suspicious money than any other of the leaks
The documents come up against the names of the other five largest banks.
Of the 2 2 trillion in suspicious transactions, 1. 1.2 trillion has been moved by the bank.
Almost all the rest of the process was done by JPMorgan, Standard Chartered, Bank of New York Mellon and Barclays.
Several other banks, including Society Generale, HSBC, State Street Corporation, Commerzbank AG, and China Investment Corporation, also processed billions.
Since the report was published – European bank stocks – the pressure under the coronavirus resurgence has already eased. Shares of Dutsch Bank were down 5% at 3:38 a.m. ET, while Barclays lost more than 6%.
Many of the banks named in the report have responded to statements made to BuzzFeed News.
Leaks were 0.02% of total SARS
Reporters saw more than 2,100 leaked SARS – but this is just one tip of the iceberg.
According to ICIJ, more than 12 million SARs were filed with Finsen from 2011 to 2017, making up 0.02% of the total.
HSBC moved money for WCM 777 Ponzi scheme which cost thousands
The files show that HSBC allowed fraudsters associated with WCM 777, a 80 80 million Ponzi scheme, to move money around the world, the BBC reported.
In 2013 and 2014, the bank relocated fraudsters’ money from the US to Hong Kong, despite promising to clamp down on money laundering, the outlet said.
In 2012, following a U.S. Senate inquiry, investigators were fined .9 1.9 billion for their role in preventing money laundering, known as “drug kingpins and rogue nations,” the BBC reported.
But the following year, fraudsters working with WCM 777 were able to move more than 15 15 million through HSBC, despite warnings that it was a scam, leaked documents show.
At the time of notification, WCM777 was banned from doing business in three states.
According to the BBC and BuzzFeed News, the Ponzi scheme targeted poor communities in various countries and victimized thousands of Asian and Latino immigrants.
HSBC told the BBC it always complied with its legal duty to report such activities.
Read the full BBC report here.
Banks processed millions for the family of a Kazakh politician wanted by Interpol
JPMorgan Chase, along with Bank of America, Citibank, American Express and others, processed large transactions involving Kazakh politicians wanted by Interpol.
The family of Viktor Khripunov, the former mayor of Almaty, Kazakhstan’s largest city, used JPMorgan Chase even after hitting a red notice via the Internet.
At the time of the transaction, Khripunov and his wife were accused of money laundering, fraud and forming an organized crime group, Newsweek reported.
They were convicted in absentia and fled to Switzerland. They called the allegations politically motivated, according to a BuzzFeed News report.
Putin’s ally, Arkady Rottenberg, may have used Barclays to avoid money lending and sanctions.
Documents suggest the UK-based Barclays Bank, a close ally of Russian President Vladimir Putin, could be used to evade sanctions and embezzle money.
The BBC reports that Putin’s childhood friend Arkady Rottenberg is one of several associates who were placed under EU and US sanctions by Russia after the annexation of Crimea in 2014. The sanctions were to prevent Rottenberg from doing business with Western banks.
But companies controlled by Rottenberg appeared in numerous SARs in the leak, according to the BBC.
About $ 77 million moved by HSBC from 2012 to 2016 by a company called Advantage Alliance; U.S. The Senate has said there is evidence that the company is owned by Rottenberg. A Senate investigation has found that the company was buying secret art using its Barclays account to avoid these restrictions.
Barclays closed the Advantage Alliance account in 2016, but the leaked SARS shows that the bank will continue to deal with many other companies considered to be owned by Rottenberg until 2017, the BBC reported.
Barclays denied any wrongdoing.
Read the full BBC report here.
Suspected Iranian money worth 14 142 million was processed by the UAE
U.S. Prosecutors allege that Dubai-based Guns General Trading was used by the United Arab Emirates to extort money from the Iranian state and protect it from international sanctions, according to the BBC.
The BBC said that in 2011 and 2012, the UAE’s central banking system processed 14 2,142 million in deals for the company, although they were considered suspicious.
The BBC reports that a New York branch of Standard Chartered Bank has recorded hundreds of suspicious transactions from the company and flagged them off at the UAE’s central bank, but did not mention the Iran connection, the BBC reported.
The UAE’s central bank said it had issued a warning for law enforcement and closed accounts, while Guns General Trading used other state-owned banks to make another $ 108 million in transactions by September 2012.
In 2016, the U.S. said the company was involved in a major sanctions-theft scheme. He has been injured for the past two years, the BBC has reported.
The UAE’s central bank did not respond to a request for comment from the BBC.
Read the full report here.
A major donor to the UK’s ruling Conservative Party was linked to the Kremlin
The husband of UK Prime Minister Boris Johnson, a major Conservative donor, has received money from a millionaire linked to Putin, under US sanctions, documents show.
The files showed that Vladimir Chernukhin, the husband of Lubov Chernokhin, who gave about 2. 2.2 million to the Conservative Party, was given 7. 8.78 million by the Shfashore company, which could be found by a Russian politician named Suleiman Karimov and Aligarh.
U.S. Karimov was one of the many alligators discussed in the 2018 report by the Treasury Department on “corrupt” Russian activity. He is accused of money laundering and tax arrears in Europe, the Treasury report said.
Lubov Chernukhi has spent time in the company of three prime ministers – and she once paid 5 205,000 to play tennis with Johnson, according to the BBC.
North Korea has accused shell companies and U.S. Laundered money using the strings of banks
The leaked documents indicate that despite international sanctions blocking North Korea’s entry into the global financial system, it has laundered more than 4 4,174.8 million.
NBC News reported that documents show that approximately 2008 to 2017 the transactions declared as suspicious were cleared by US banks, including JPMorgan Chase and Bank of New York Mellon.
The North Korean wire transfers marked in the SARS were often facilitated by Chinese and shell companies, NAB News reported.
Experts told NBC News that the transaction revealed all the identities of money laundering.
Read the full report here.
Banks first saluted Paul Manafort as a suspect for years before he was arrested.
The bank transaction linked to a former strategist of President Donald Trump, who was convicted of fraud in 2018, was flagged as a 2012 suspect six years ago, the ICIJ reported.
According to IPIJ, the payments to Manafort, processed by JPMorgan Chase, attracted more than 50 million SARs.
The bank processed 6.9 million after Manafort resigned from Trump’s campaign, ICIJ reported.
Manafort is serving a seven-year term for tax fraud, bank fraud and failure to report foreign bank accounts.
Deutsche Bank managers knew more about the infamous trading scandal than they claimed
The 2017 Mirror Trading Scandal – a 10 10 billion money laundering scheme used by crime officials, drug cartels and terrorist networks – has been fined by Deutsche Bank in its Moscow office fees and blamed on middlemen.
But the leaked SARO shows that awareness of the issues at the center of the scam is much higher in the company, BuzzFeed reported.
According to BuzzFeed, a warning of serious failure in the company was sent to the bank’s chair and its supervisory board.
The files show that Bank of America was so concerned that it marked SARS about the bank’s transactions. When Bofa managers tried to discuss the matter in London, they were told to leave the building.
Christian Sewing, who is today the CEO of Deutsche Bank, runs the Moscow Debit Office Fees overseeing the bank’s Moscow deals – but the office fees were made clear, BuzzFeed said.
Deutsche Bank told BuzzFeed that Sewing was not personally involved in the Moscow audit.
Read the full story here.
Financial regulators still hold only 1% in the activity behind dirty money
The Finsen leak is a huge 2,100 documents, but that’s still a fraction of what’s out there.
As ICIJA reports, banks are often processing the final owners of accounts, or they don’t know about their inquiries, or don’t inquire about them.
David Lewis, executive secretary of the anti-money laundering group Financial Action Task Force, told ICIJ that compliance is more about going through the motions than taking real action, saying: “Everyone does really badly.”
In a 2011 report by the United Nations Office on Drugs and Crime, “less than 1% of global illicit financial flows are currently captured and stabilized.”
Read the full story here.
