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Business

FinCEN Files: Leaked documents reveal how world’s major banks laundered billions of dollars

  • The reports were based on the leaked Suspicious Activity Reports (SARs) filed by banks and other financial firms with the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN).
21 Sep 2020

A series of leaked documents have revealed how the world major banks have been laundering billions of dollars over a period of nearly two decades, despite red flags about the origins of the money.

BuzzFeed the International Consortium of Investigative Journalists (ICIJ) and other media organizations, citing confidential documents submitted by banks to the United States government revealed that major banks have defied money laundering crackdowns and have laundered more than $2 trillion worth of transactions of criminals and criminal networks.

The records called the FinCEN Files show that five global banks i.e. JPMorgan, HSBC, Standard Chartered Bank, Deutsche Bank and Bank of New York Mellon remained involved in the practice even after U.S. authorities fined them for earlier failures to stop the flow of dirty money.

The reports were based on the leaked Suspicious Activity Reports (SARs) filed by banks and other financial firms with the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCen), hence the name FinCEN files, which are more than 2,500 documents, based on over 2,100 SARs most of which were files that banks sent to the US authorities between 2000 and 2017.

The leaked documents were shared by BuzzFeed News and the International Consortium of Investigative Journalists (ICIJ) and other media organizations.

THE MAJOR REVELATIONS

As per the FinCEN Files, HSBC allowed criminals to move millions of dollars of stolen money around the world, even after it learned from US investigators the scheme was a scam. US based JP Morgan gave green a company to move more than $1bn through a London account without knowing who owned it.

It also shared evidence that one of Russian President Vladimir Putin's closest aides used Barclays bank in London to avoid sanctions which were meant to stop him using financial services in the West.

Another revelation was that the UAE’s central bank failed to act on warnings about a local firm that was helping Iran evade sanctions. Germany’s Deutsche Bank was involved in money laundering for organized crime, terrorists, and drug traffickers.

Documents also revealed that Standard Chartered moved cash for Arab Bank for more than a decade after clients' accounts at the Jordanian bank had been used in funding terrorism.

FinCEN Files and Pakistan

A sample of 29 transactions extracted from the FinCEN Files showed how suspicious transfers flowed to and from Pakistan, under which $ 1,942,560 were received and $ 452,000 were sent.

As per documents, some 12 suspicious transactions were carried out by Allied Bank Limited which received $ 1,001,170, United Bank Limited received $ 399,620 from eight transactions, Habib Metropolitan Bank Ltd received $ 74,980 from two such transactions, $ 452,000 were sent from Bank Alfalah Limited while the bank received $ 99,480 from three such transactions.

Furthermore, Standard Chartered Bank received $ 199,860 from four such transactions, Habib Bank, Limited received $ 167,450 from one such transaction. These transactions were processed via two U.S.-based banks i.e. Standard Chartered Plc and the Bank of New York Mellon Corp.

It is pertinent to know that the sample of transactions are cases where sufficient details about both the originator and beneficiary banks were available. The ICIJ report said that the data represents a fraction of the total transactions found in the FinCEN files.