Banks moved alleged dirty money despite red flags, leak shows

Banks moved alleged dirty money despite red flags, leak shows
The big leak shows how banks hide the suspicious transactions. Source: BBC
2 Min Read

Daily US Times: Citing confidential documents submitted by banks to the United States government, BuzzFeed and other media have reported that several global banks moved large amount of allegedly illicit funds over a period of nearly two decades, despite red flags about the origins of the money.

Sunday’s series of news reports by several media was partly based on documents, called suspicious activity reports (SARs), filed by financial firms and banks with the US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN).

The SARs, which the reports said numbered more than 2,100, were obtained by BuzzFeed News and shared with other media organisations including the International Consortium of Investigative Journalists (ICIJ).

The ICIJ reported that the files contained information about more than 2 trillion dollars worth of transactions between 1999 and 2017. These transactions were flagged by internal compliance departments of financial institutions as suspicious. The SARs are in themselves not necessarily proof of wrongdoing.

Five global banks appeared most often in the documents – HSBC, Deutsche Bank, Standard Chartered, JPMorgan and Bank of New York Mellon (BNY Mellon), the ICIJ reported.

According to the Treasury Department’s Office of the Comptroller of the Currency, a bank has a maximum of 60 days to file SARs after the date of the initial detection of a reportable transaction.

In some cases, the banks failed to report suspect transactions until years after they had processed them, the ICIJ report said that.

The report said the SARs also showed that banks often moved funds for companies that were registered in offshore havens, such as the British Virgin Islands, and did not know the ultimate owner of the account.

Among the types of transactions highlighted by the report: funds processed by JPMorgan for potentially corrupt individuals and companies in Malaysia, Ukraine and Venezuela; money linked to a Ukrainian billionaire processed by Deutsche Bank and money from a Ponzi scheme moving through HSBC.

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