Some of the world’s largest banks have allowed $2 trillion worth of suspicious or fraudulent activity to take place, including money laundering for criminal gangs and terrorists, according to leaked documents. The so-called “FinCEN files” consist of more than 2,000 suspicious activity reports, referred to as SARs, sent by banks to the U.S. Treasury Department from 1999 to 2017 to alert authorities of possible criminal activity. The documents were leaked to the U.S. news network Buzzfeed News and shared by a network of journalists.
The leaked documents claimed that despite earlier warnings from U.S. authorities, British banking giant HSBC transferred $80 million in fraudulent funds to Hong Kong via the United States.
JPMorgan Chase transferred $1 billion from an account in London that was later found to belong to Semyon Mogilevich, a Russian mafia boss on the FBI’s Most Wanted list.
Deutsche Bank is accused of moving illegal dirty money for money launderers with ties to organized crime groups and terrorists. The names of Standard Chartered and BNY Mellon also appear several times in the leaked documents, and all of the banks involved say that the cases are from the past and that they are in full compliance with the law and regulations.
Deutsche Bank spokesman Jörg Egendorf said, “Most importantly, we have made significant investments in this compliance area since 2015.”
So why weren’t these transactions stopped? According to financial crime expert Tom Kittinger, banks have a hard time spotting criminal activity.
Tom Kittinger, director of the Center for Financial Crime and Security Studies at the Royal United Services Institute, said, “I like to look at this problem figuratively, and imagine you’re standing on a corner of Oxford Street in London, which is a major shopping thoroughfare, and someone says, ‘Well, you’ve got to identify the person who’s just stopped by the store, or is on their way to the store. Stealers, ‘Do you think it’s easy to do?'”
The global system for reporting suspicious financial activity is not up to the task, says Kittinger. There are half a million suspicious activity reports filed every year in the U.K. and millions in the U.S. by banks and accountants and others,” he says. What do the authorities do with all this data? They obviously couldn’t look into each and every one of these report documents.”
British politics has also come under scrutiny, with Lubov Chernouchin, who is pictured standing next to Theresa May, who was prime minister at the time in 2019, donating $2.2 million to the Conservative Party.
Leaked documents reveal that her husband was secretly funded by U.S.-sanctioned Russian political and business magnate Suleyman Kerimov, who is close to President Vladimir Putin. Chernuchin’s donations were legal and fully declared under British law.
Transparency International estimates that $100 billion in dirty money changes hands from London each year.
If you want to launder money, London has all the tools you need, it has law firms, it has global banks, it has offshore financial centers, it has real estate to invest in, it has private schools to spend your money on, so the sooner the U.K. responds to financial crime as if it were playing an international role, the better,” says Kittinger. We have to speed up the process of fixing the system, because now the criminals have the upper hand.”
Kittinger said that despite the banks’ vows, financial crime is still occurring on a large scale, and the government and financial institutions must do more to combat it.
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