Updated: September 21, 2020 7:26:51 am
In most cases, national branches of Indian banks have been used to receive or remit funds; in some cases, bank accounts with foreign branches of Indian banks have also been used to carry out these transactions.
Layer by layer, the secret surrounding international money flows involving Indians has been uncovered, beginning with the overseas leaks in 2013, Swiss leaks in 2015, Panama documents in 2016, and Paradise papers in 2017, in a series of investigations carried out The Indian Express. Now comes the FinCEN files.
The latest publication of the newspaper, as of today, examines the Indian connections in a cache of more than 2000 secret documents, so that secret banks cannot even confirm their existence, which have been alerted by the main financial watchdog of USA, Treasury Department Financial Crimes. Enforcement Network (FinCEN) for suspected money laundering, terrorism, drug trafficking, or financial fraud.
These documents, called Suspicious Activity Reports or RAS, which constitute the FinCEN Archives, are not evidence of illegality. They reflect the views of watchdogs within banks, known as compliance officers, who report past transactions that had the characteristics of financial crimes or that involved clients with high-risk records or run-ins with the law.
In effect, they are crucial red flags raised by banks signaling law enforcement agencies for further investigation. (See explained). In fact, the US Department of Justice has launched investigations and obtained convictions in SAR-related cases.
Headquarters of FinCEN, America’s leading financial watchdog, in Virginia. (Source: Scilla Alecci / ICIJ)
The Indian Expresstogether with 109 media organizations in 88 countries, including Le Monde (France), Asahi Shimbun (Japan), Suddeutsche Zeitung (Germany), Aftenposten (Norway), NBC (USA), BBC and Australian Broadcasting Corporation, partnered with the International Consortium of Investigative Journalists (ICIJ) and BuzzFeed News to track the Indian entities and banks named in these SARs filed with FinCEN between 1999 and 2017.
More than eight out of ten of these SARs were submitted by: Deutsche Bank, Bank of New York Mellon (BNYM); Standard Chartered Bank, Citibank and JP Morgan Chase. The total value of the transactions covered in these SARs: $ 2 billion.
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SARs provide a rare insight into how entrepreneurs, politicians and their companies use banking channels around the world to move their wealth across borders or to tax havens to avoid tax or detection.
More than three months The Indian Express investigated all SARs with a trace from India, further investigating those already under scrutiny in India for alleged financial wrongdoing. In fact, a key finding is that, in many cases, the very fact that Indian agencies are investigating individuals and companies is part of the SAR reported to FinCEN.
Hence, Indian entity transactions mentioned in scams like 2G scam; the Augusta Westland scandal; the Rolls Royce bribery case and the Aircel-Maxis case, as well as those involved in other cases of corruption and evasion of duties, have been included in the FinCEN hot list.
It is significant that these cases are also being investigated by agencies such as the Central Bureau of Investigation; the Directorate of Inspection and the Directorate of Revenue Intelligence.
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The Indian Express The investigation has revealed transactions by a number of individuals and businesses: an imprisoned art and antiques smuggler; a global Indian-owned diamond firm named in several overseas leaks; a world-class hospitality and medical care group; a bankrupt steel company; a luxury car dealer who allegedly cheated on several high-net-worth individuals; a multinational Indian conglomerate; sponsor of the Indian Premier League (IPL) team; an alleged hawala merchant who became the subject of a massive fight within the Directorate of Enforcement (ED) and a key financier of a gift from the Indian underworld, among others.
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In most cases, national branches of Indian banks have been used to receive or remit funds; in some cases, bank accounts with foreign branches of Indian banks have also been used to carry out these transactions.
Up to 44 Indian banks are on file with FinCEN primarily because they are “correspondent banks” of the foreign banks that have submitted these SARs. Keys on this list are Punjab National Bank, Kotak Mahindra, HDFC Bank, Canara Bank, IndusInd Bank, and Bank of Baroda, among others.
There are a total of 3,201 transactions that have been listed as ” suspicious ” by nature and total $ 1.53 billion, but this is only those where full Indian addresses linked to different entities (senders, banks, payees) are available . These are attached as spreadsheets in each SAR.
In addition, there are thousands of other transactions, also linked to Indian entities where the senders or beneficiaries have addresses in foreign jurisdictions. These are contained in the SARs themselves.
Among the major global revelations, the investigation traced the dollars from a Rhode Island drug dealer to a chemist’s lab in Wuhan, China; explored scandals that crippled the economies of Africa and Eastern Europe; tomb crawlers who looted ancient Buddhist artifacts that were sold to galleries in New York; surveyed Venezuelan tycoons who diverted money from public housing and hospitals; and examined the largest gold refinery in the Middle East, the subject of an extensive and never disclosed investigation of money laundering in the United States.
Dozens of political figures featured in the documents include Paul Manafort, Donald Trump’s former campaign manager who was convicted of fraud and tax evasion.
JPMorgan processed more than $ 50 million over a decade between Manafort and his associates’ shell companies – at least $ 6.5 million of that over 14 months after he resigned from the campaign amid ensuing money laundering allegations. of his ties to Ukrainian officials connected to Russia.
Earlier this month, in anticipation of this series of investigations, FinCEN issued a statement in New York that “unauthorized release of SAR is a crime that can affect the national security of the United States, compromise police investigations, and threaten the safety and security of the United States. institutions and individuals who file such reports. ”FinCEN said it had forwarded this to the United States Department of Justice and the Office of the Inspector General of the United States Department of the Treasury.
In response to this, ICIJ said that reporting for FinCEN’s archives is legal and appropriate. “Our reports expose how banks and regulators have failed the public by allowing the flow of dirty money to go unchecked despite a system that is supposed to prevent it.”
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