(Getty Images)
  • A major leak of suspect transactions that were flagged by banks to the US authorities has just been published online.
  • The so-called FinCEN files include more than 170 transactions at South African banks.
  • At least one transaction may have a Gupta link.
  • For more articles, go to www.BusinessInsider.co.za.

Thousands of leaked files that have just been released show how major institutions had engaged for years in handling up to $2 trillion in dirty money.

The documents are part of a collection of files that belongs to the Financial Crimes Enforcement Network (FinCEN), a US government agency operating to detect and prevent financial crimes, and were first published by BuzzFeed News and the International Consortium of Investigative Journalists (ICIJ).

Banks sent these files to the US authorities to raise concern about what their clients were doing.

The ICIJ analysed the leaked documents over the last 16 months, with more than 400 journalists across 88 countries taking part.

The documents, known as the FinCEN files, showed that five banks - JPMorgan, Standard Chartered, Deutsche Bank, Barclays and BNY Mellon - handled the most illicit funds between 1997 and 2017. JPMorgan, HSBC, and Deutsche Bank facilitated the movement of criminal money even after getting caught, the agency reported.

Between 1999 and 2017, $1.3 trillion was flagged to have passed through Deutsche Bank, German broadcaster Deutsche Welle reported.

Here’s what journalists found after analysing the FinCen files:

  • Deutsche Bank helped moved money as part of money laundering for organised crime, terrorists, and drug traffickers, Buzzfeed reports.
  • Even after HSBC learned about a scam, it allowed fraudsters to transfer millions around the world, the BBC reports.
  • Russian billionaire Arkady Rotenberg, one of Vladimir Putin's closest friends, may have used Barclays Bank to launder money and dodge sanctions, the BBC reports.
  • JP Morgan allowed a company to move more than $1 billion through a London account without knowing who owned it – and it may turn out to have belonged to a criminal wanted by the FBI, the BBC reports.

The report by the ICIJ highlights 173 bank transactions that went via South Africa – at a total value of almost $61 million (R1 billion) – which were flagged as potentially suspicious.

Standard Bank apparently reported 169 of the 173 transactions that were highlighted in the report.

Standard Bank may have flagged transfers to banks in Nigeria and Lichtenstein, as well as a number of transactions involving Chinese banks. Standard Bank has close commercial ties with the Industrial and Commercial Bank of China, which bought a 20% stake in the bank in 2007. The two companies hold a joint stake in a global trading business.

Standard Bank did not want to comment on the nature of these transactions, but referred Business Insider South Africa to a FinCEN statement that “unauthorised disclosure of SARs [Suspicious Activity Reports] is a crime that can impact the national security of the United States.”

“Standard Bank complies with local and international anti-money laundering legislation and takes this responsibility seriously. As required by such legislation, and as a responsible corporate citizen, the bank files suspicious activity reports (SARs) to assist in maintaining the integrity of the global financial system. The bank diligently monitors customer transactions and complies with its obligations to report any suspicious transactions to the relevant authorities,” the bank said in a statement.

Transactions in South Africa via two other banks were also highlighted in the ICIJ report: Standard Chartered Bank, and Citibank.

Citi flagged a transfer from a Standard Chartered bank account in Hong Kong to one of its local account holders.

“Consistent with our commitment to protect the integrity of the financial system, Citi is diligent in filing Suspicious Activity Reports with the US Department of the Treasury when appropriate. Given the confidential nature of these reports, we do not comment on or confirm any particular report or transaction,” a Citi spokesperson said.

Standard Chartered also flagged a transaction, in 2013, which involved an almost $10.8 million payment to a Deutsche Bank account in Abu Dhabi. Standard Chartered previously confirmed that it closed some bank accounts linked to the Gupta family, which has since settled in Abu Dhabi, in 2014.

In response, a Standard Chartered spokesperson in South Africa said the bank won't comment on the specific transaction.

"We file SARs when circumstances warrant and that means our screening and monitoring systems are working as intended. A SAR filing does not mean there has been criminal activity.  

"We report these matters to law enforcement so they can investigate and, if they see fit, take further action.  The reality is that there will always be attempts to launder money and evade sanctions; the responsibility of banks is to build effective screening and monitoring programmes to protect the global  financial system."

She said that Standard Chartered has nearly 2,000 staff worldwide dedicated to preventing, detecting and reporting suspicious transactions. "In 2019 we monitored more than 1.2 billion transactions for potential suspicious activity and screened more than 157 million for sanctions compliance. Our monitoring and investigations work has contributed to the conviction of criminals and our efforts have been recognised by law enforcement in multiple jurisdictions."



Reporting by Business Insider US and SA.

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