US Government Leak Reveals How Major Banks Move Dirty Money for Terrorists and Criminals

Here's what you need to know about the FinCEN Files—a leak that exposes how some of the world's biggest banks support some of the world's richest criminals.
September 21, 2020, 5:19am
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A mass leak of highly secret United States government documents reveals that some of the world’s biggest banks have laundered trillions of dollars of illicit cash for criminal networks and shady individuals—including foreign oligarchs and terrorists.

The International Consortium of Investigative Journalists (ICIJ) examined a tranche of more than 2,100 suspicious activity reports filed by global banks to the US Treasury Department’s Financial Crimes Enforcement Network (FinCEN), and found that five international banks moved more than $US2 trillion of suspected dirty money through the global financial system between 1999 and 2017.

Those banks—JPMorgan, HSBC, Standard Chartered Bank, Deutsche Bank and Bank of New York Mellon—were found to have defied money-laundering crackdowns, even after US authorities fined them for previous failures to stem flows of dirty cash.

Some of the potentially corrupt payments listed in the FinCEN files involved the setting up of global shell companies that were linked to money laundering, arms deals, and drug cartels, and include powerful and at-times dangerous figures from more than a dozen countries. Among them: Paul Manafort, former campaign manager for President Donald Trump, who resigned from the campaign in August 2016 amid a storm of money laundering and corruption allegations that stemmed from his work with a pro-Russian political party in Ukraine.

A New York Times report claimed at the time that Manafort may have received $12.7 million in off-the-books funds from Ukraine’s Party of Regions between 2007 and 2012. The FinCEN files now reveal that JPMorgan processed more than $50 million in payments for Manafort over a decade, including at least $6.9 million in transactions in the 14 months after he resigned from the Trump campaign.

JPMorgan—America’s biggest bank—also moved more than $1 billion for the fugitive financier behind Malaysia’s 1MDB scandal, along with a number of other tainted transactions that continued to move through the bank’s accounts despite it pledging to improve its money laundering controls as part of settlements it reached with US authorities in 2011, ‘13 and ‘14.

Multinational bank Standard Chartered was found to have moved money on behalf of Al Zarooni Exchange—a Dubai-based business that in 2015 was accused of laundering cash on behalf of the Taliban—as well as Altaf Khanani—a Pakistani national who laundered billions of dollars a year for drug cartels and terror organisations like al-Qaeda, Hezbollah and the Taliban.

HSBC, Deutsche Bank and Bank of New York Mellon appear to have engaged in similar conduct with similarly dubious clients. Other names in the files include drug kingpins, kleptocrats and Russian oligarchs who used the banks to avoid sanctions that were meant to stop them getting their money into the West.

It’s worth noting that suspicious activity reports merely reflect the concerns of watchdogs within banks, however, and are not necessarily evidence of any criminal conduct or wrongdoing.

Nonetheless, ICIJ notes that the FinCEN files—which were originally obtained by Buzzfeed News—represent less than 0.02 percent of the more than 12 million suspicious activity reports financial institutions filed with FinCEN between 2011 and 2017. Those reports accuse banks of moving cash through their accounts for people they cannot identify, failing to report transactions with all the hallmarks of money laundering until years later, and doing business with clients who were enmeshed in financial frauds and public corruption scandals.

"These banks are allowing the worst of the worst to use their accounts as a way to wash their money," Anthony Cormier, a reporter with BuzzFeed News, told the ABC. "This system is not working. Criminals are allowed to move money around the world without being stopped and the banks are allowing it to happen because they're happy to take profits."

Last week FinCEN announced proposals to overhaul its anti-money laundering programmes. The organisation also warned, however, that this mass leak of its suspicious activity reports could impact on US national security, compromise investigations, and threaten the safety of those who file the reports in the first place.

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