Banks Suspected Illegal Activity, but Processed Big Transactions Anyway
"Australia's Westpac slapped with 23 million money laundering breaches "Three more AMP directors leave in wake of bank royal commission scandal""
A leak of thousands of “suspicious activity reports” that banks filed with regulators shows the widespread nature of illicit money flows.
BuzzFeed obtained suspicious activity reports filed by the largest U.S. lenders, including JPMorgan Chase, as well as major international banks. Amr Alfiky for The New York Times
By Noam Scheiber and Emily Flitter
Sept. 20, 2020, 6:50 p.m. ET
A cache of thousands of reports that major banks filed with federal regulators shows that they helped suspected terrorists, drug dealers and corrupt foreign officials move trillions of dollars around the world, despite the banks’ concerns about the suspicious nature of the transactions.
Banks are required to file the reports with the U.S. Treasury Department’s Financial Crimes Enforcement Network, or FinCEN, about transactions that they believe could be part of a money laundering scheme, fraud or other illegal activity.
BuzzFeed obtained suspicious activity reports filed by the largest U.S. lenders — including JPMorgan Chase, Citigroup and Bank of America — and major international institutions like Deutsche Bank, HSBC and Standard Chartered. Many of those banks have been repeatedly penalized by U.S. and other authorities for their roles in money laundering.
BuzzFeed and the International Consortium of Investigative Journalists, which collaborated on the project, did not make public many of the actual suspicious activity reports that they obtained. In a statement .. https://www.fincen.gov/news/news-releases/statement-fincen-regarding-unlawfully-disclosed-suspicious-activity-reports .. this month, FinCEN warned that “the unauthorized disclosure of SARs is a crime that can impact the national security of the United States, compromise law enforcement investigations, and threaten the safety and security of the institutions and individuals who file such reports.”
Among BuzzFeed’s main findings were that Standard Chartered, which operates primarily in Asia, the Middle East and Africa, appears to have helped move funds on behalf of a Dubai-based company that reportedly had ties to the Taliban. JPMorgan, Bank of New York Mellon and other banks appear to have helped move more than $150 million for companies tied to the North Korean regime, according to a companion report by NBC News .. https://www.nbcnews.com/news/world/secret-documents-show-how-north-korea-launders-money-through-u-n1240329 .
In one suspicious activity report .. https://www.documentcloud.org/documents/7213798-Bank-of-America-Filing-About-Deutsche-Bank.html .. obtained by BuzzFeed, Bank of America officials in early 2016 warned the federal government about their serious concerns about how Deutsche Bank was failing to detect and prevent money laundering. Deutsche Bank has been among the world’s most heavily penalized banks, in part for its work laundering money for wealthy Russians.
Patricia Wexler, a JPMorgan spokeswoman, said: “We have played a leadership role in anti-money-laundering reform that will modernize how the government and law enforcement combat money laundering, terrorism financing and other financial crimes.”
A spokesman for Standard Chartered, Chris Teo, said, “We take our responsibility to fight financial crime extremely seriously and have invested substantially in our compliance programs.”
A representative for Bank of New York Mellon did not immediately respond to a request for comment.
Deutsche Bank has previously said that it is working to improve its anti-money-laundering systems.
Deutsche Bank has been under scrutiny in the United States because of its longtime role as Mr. Trump’s primary lender. BuzzFeed said that it did not receive any suspicious activity reports involving Mr. Trump. The New York Times reported last year .. https://www.nytimes.com/2019/05/19/business/deutsche-bank-trump-kushner.html .. that anti-money-laundering officers at Deutsche Bank raised concerns about transactions involving the accounts of Mr. Trump and Jared Kushner, the president’s son-in-law, but that bank managers decided not to file suspicious activity reports.
The suspicious activity reports relating to Mr. Manafort appear to have helped bring the large collection of documents to light. According to BuzzFeed, Democratic congressional committees requested the documents from the Treasury Department as they investigated Mr. Trump and the 2016 presidential election.
The documents suggest that banks sometimes use the system of reporting suspicious activities as legal cover for facilitating potentially illegal activity and that the reports do little to help federal officials prosecute the perpetrators.
The biggest banks each file tens of thousands of suspicious activity reports every year, and the total number has increased significantly over the past decade. At the same time, the staff of FinCEN has shrunk.
Recently, banks have pushed Congress to relieve them of some of their anti-money-laundering responsibilities. They say they are so worried about the legal consequences of failing to report suspicious activities that they err on the side of over-reporting transactions. In 2017, 19 large banks filed a total of 640,000 of the suspicious activity reports, according to a study .. https://bpi.com/wp-content/uploads/2018/10/BPI-AML-Sanctions-Study-vF.pdf .. by the Bank Policy Institute, a lobbying group.
[Insert: The world is awash with illegality. Always catching up. Like the war on drugs. Thank goodness for a president interested in the problem, like Trump. haha]
It is not unusual for banks to alert regulators to activity that may be illegal and then process the transactions they flagged. Between 2011 and 2013, for instance, JPMorgan wired money to banks in Switzerland, Lebanon and Nigeria on behalf of a convicted money launderer .. https://www.nytimes.com/2019/03/28/business/jpmorgan-nigeria.html , reported the transactions to British and American authorities and carried on with its business. The Nigerian government is now suing the bank in British court for disbursing money in those transactions that officials claim should never have been allowed out of the country.
[The Patriarchal Allure of The Family "The Political Enclave That Dare Not Speak Its Name" [...] In its third episode, The Family explores the recent ties between the Christian right and Vladimir Putin’s Russia. (Doug Burleigh, one of the Fellowship’s current leaders, was interviewed by the FBI about his dealings with the convicted Russian agent Maria Butina .. https://www.theatlantic.com/politics/archive/2018/12/maria-butina-pleads-guilty-russian-agent/578146/ .) The fourth details the Fellowship’s previous relationships with dictators, and its ongoing attempts to enforce “Christian” and anti-LGBTQ policies in countries such as Romania, with gay marriage in the United States seeming at this point like a lost battle. Along the way, Fellowship-affiliated congressmen seem depressingly eager to embrace strongmen under the pretense of Jesus’s name. SenatorJames Inhofe[A top pet hate because of his anti-climate change science position, for one.] tells the Nigerian dictator Sani Abacha that he “loves him.” Representative Mark Siljander travels to Libya, where he asks Qaddafi for forgiveness for the U.S. bombing that killed his daughter. (Siljander was later sentenced to a year in prison for accepting stolen funds from a charity with ties to terrorism.) https://investorshub.advfn.com/boards/read_msg.aspx?message_id=151409917]
Experts on financial crime said the revelations from BuzzFeed should galvanize efforts to overhaul how money laundering is investigated and prosecuted.
“Trillions of dollars in dirty money gushes through the financial system in a toxic stew of criminal proceeds,” wrote Linda Lacewell, the superintendent of the New York Department of Financial Services, on Twitter .. https://twitter.com/LindaLacewell/status/1307754729611710464 . “The SAR should be the beginning of the analysis not the end. We must act.”
Noam Scheiber is a Chicago-based reporter who covers workers and the workplace. He spent nearly 15 years at The New Republic magazine, where he covered economic policy and three presidential campaigns. He is also the author of “The Escape Artists.” @noamscheiber
Emily Flitter covers banking and Wall Street. Before joining The Times in 2017, she spent eight years at Reuters, writing about politics, financial crimes and the environment. @FlitterOnFraud
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