FinCEN files: Big banks let $2tn ‘dirty money’ move around world
The FinCEN files show that the world’s biggest banks have
allowed criminals to move “dirty money” around the globe. In total, these
reports flagged more than $2 trillion in transactions, according to BuzzFeed
News.
The BBC reported that Russian oligarchs used banks to avoid
sanctions and moved their money into the West.
It is the latest in a string of leaks over the past five
years that have exposed secret deals, money laundering and financial crime, a
BBC report said.
The FinCEN files are more than 2,500 documents, most of
which were files that banks sent to the US authorities between 2000 and 2017.
These documents are some of the international banking
system’s most closely guarded secrets. Banks use them to report suspicious
behavior but they are not proof of wrongdoing or crime.
They were leaked to Buzzfeed News and shared with a group
that brings together investigative journalists from around the world, which
distributed them to 108 news organisations in 88 countries, including the BBC’s
Panorama program.
FinCEN is the US Financial Crimes Investigation Network.
Concerns about transactions made in US dollars need to be sent to FinCEN, even
if they took place outside the US.
Suspicious activity reports, or SARs, are an example of how
those concerns are recorded. A bank must fill in one of these reports if it is
worried one of its clients might be up to no good. The report is sent to the
authorities, BBC said.
It has been revealed through these documents that HSBC
allowed fraudsters to move millions of dollars even after it learned from US
investigators that the scheme was a scam.
JP Morgan allowed a company to move more than $1 billion
through a London account without knowing who owned it. The bank later
discovered the company might be owned by a mobster on the FBI’s 10 Most Wanted
list.
There is also evidence that one of Russian President
Vladimir Putin’s closest associates used Barclays Bank in London to avoid
sanctions meant to stop him.
According to BBC, the UK is called a “higher risk
jurisdiction” like Cyprus, according to the intelligence Division of FinCEN.
That’s because of the number of UK registered companies that appear in the
SARs. Over 3,000 UK companies are named in the FinCEN files – more than any
other country.
Deutsche Bank moved money launderers’ dirty money for
organised crime, terrorists and drug traffickers. 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.
There have been a number of big leaks of financial
information in recent years, including 2017 Paradise Papers. The 2016 Panama
Papers – Leaked documents from the law firm Mossack Fonseca showed more about
how wealthy people are using offshore tax regimes, the BBC said.
According to BuzzFeed News, some entities have been flagged
numerous times in the FinCEN Files. Mayzus Financial Services, an online
payment processing company that served clients involved in a bitcoin ring, sets
the record, appearing as a subject of 36 SARs.
Second is Kaloti Jewelery International, a Dubai-based
precious metals company that was flagged as a subject in 34 separate SARs by
eight different banks.
More than 250 SARs reference people with addresses in the
US, and more than 120 with addresses in Russia. The UK, China, Germany, the
United Arab Emirates, Canada, and Ukraine were also common locations for
people, each appearing in at least 20 reports, it said.
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