FinCEN Files: Big Banks Moved $2 Trillion in Illicit Funds

Another financial scandal came out in the public domain as the recently leaked FinCEN Files show how multiple big banks were involved in moving around $2 trillion in illicit funds across the globe between 1999 and 2017.

The revelations were made based on the suspicious activity reports (SARs) filed by the banks with the United States’ Financial Crimes Enforcement Network (FinCEN), which were recently leaked to BuzzFeed News and later passed on to other international investigative journalism consortiums, including the International Consortium of Investigative Journalists (ICIJ).

Over 2,500 pages of the leaked documents show the involvement of major global banks, including HSBC, JP Morgan, Deutsche Bank, Standard Chartered, and Bank of New York Mellon.

They were involved in facilitating laundering for funds related to criminal organizations and sanctioned entities with major lapses in Know Your Customer (KYC) ) and Anti-Money Laundering (AML) ) provisions.

Banks Handling Dirty Money

HSBC processed transfers of millions of dollars around the world linked to a Ponzi scheme, but the worst part is that the bank knew about the whereabouts of the funds. Known as WCM777, the Ponzi scheme defrauded thousands from the poor Asian and Latino communities with an assurance of doubling their investments in 100 days.

Apart from that, Barclays helped billionaire Arkady Rotenberg, a close associate of Russian President Vladimir Putin, to launder money dodging sanctions imposed on him by the United States and the European Union in 2014.

Germany’s Deutsche Bank and Standard Chartered were also involved in laundering dirty money for organized crime, terrorists, and drug traffickers, the leaked reports revealed.

The FinCEN intelligence division labeled the United Kingdom as a 'higher risk jurisdiction' as over 3,000 companies registered in the country were named in the SARs, higher than any other country.

In addition to the banks, the UAE central bank failed to act on the warnings on a local firm, which helped Iran to evade western sanctions.

Now the banks are trying to come out clean as HSBC told Reuters that all the data in the documents are "historical" and the bank has “embarked on a multi-year journey to overhaul its ability to combat financial crime across more than 60 jurisdictions.”

“[The] extent that information referenced by the ICIJ is derived from SARs, it should be noted that this is information that is pro-actively identified and submitted by banks to governments pursuant to the law,” Deutsche Bank said in a statement.

Over 2,500 pages of the leaked documents show the involvement of major global banks, including HSBC, JP Morgan, Deutsche Bank, Standard Chartered, and Bank of New York Mellon.

Banks Handling Dirty Money

Germany’s Deutsche Bank and Standard Chartered were also involved in laundering dirty money for organized crime, terrorists, and drug traffickers, the leaked reports revealed.

The FinCEN intelligence division labeled the United Kingdom as a 'higher risk jurisdiction' as over 3,000 companies registered in the country were named in the SARs, higher than any other country.

In addition to the banks, the UAE central bank failed to act on the warnings on a local firm, which helped Iran to evade western sanctions.