Some of the world’s biggest banks let criminals and fraudsters move dirty money around the world, according to leaked financial dossiers.
Banking papers detailing $2 trillion in dealings were analysed after being leaked to Buzzfeed News and shared with the International Consortium of Investigative Journalists, which distributed them to 108 news organisations, BBC Panorama said.
HSBC is one of several international banks whose name appears most in the cache of thousands of secret US government documents called the FinCEN files.
Show that HSBC continued shuttling funds through to accounts in Hong Kong months after it was warned about the Ponzi scheme worth £62 million
When HSBC, the UK’s largest bank, closed down the fraudsters’ accounts they had already been drained of the millions.
HSBC said in a statement that ‘all of the information provided by the ICIJ is historical.’
The bank said as of 2012, ‘HSBC embarked on a multi-year journey to overhaul its ability to combat financial crime across more than 60 jurisdictions.’
Along with HSBC, the other international banks which appeared most often in the documents were JPMorgan, Deutsche Bank, Standard Chartered and Bank of New York Mellon, the ICIJ reported.
Among the types of transactions highlighted by the report: funds processed by JPMorgan for potentially corrupt individuals and companies in Venezuela, Ukraine and Malaysia; and money linked to a Ukrainian billionaire processed by Deutsche Bank.
One of Vladimir Putin’s closest friends, billionaire Arkady Rotenberg may have used Barclays Bank in London to launder cash and avoid sanctions, the documents suggest.
In March 2014, Russia was hit with sanctions after the annexation of Crimea.
Rotenberg, a childhood friend of Putin, and his brother Boris were designated ‘members of the Russian leadership’s inner circle,’ by the US Treasury Department.
It is alleged that an account called Advantage Alliance, set up with Barclays in 2008, was used by Rotenberg to transfer funds to buy millions of pounds worth of art in London.
The leaked dossiers suggest that many of the transactions through the account came after the Rotenberg brothers had been sanctioned.
A spokesperson for Barclays said: ‘We believe that we have complied with all our legal and regulatory obligations including in relation to US sanctions.’
‘Given the filing of a SAR (suspicious activity report) is not itself evidence of any actual wrongdoing, we would only terminate a client relationship after careful and objective investigation and analysis of the evidence, balancing potential financial crime suspicions with the risk of “de-banking” an innocent customer.’
The Rotenbergs have not commented.
The FinCEN documents are mostly files banks sent to the US authorities between 2000 and 2017, raising concerns about suspicious activity in their clients’ accounts, Panorama said.
The programme called the documents ‘some of the international banking system’s most closely guarded secrets’.
Anti-corruption group Transparency International UK said the suspicious activity reports (SARs) ‘repeatedly cite weak money laundering defences in the UK financial sector as a major problem’.
It added: ‘The leak shows how UK banks continually fail to address suspicious activity and instead offered their services to those with money to hide.
‘Transparency International UK’s research has previously identified 86 UK banks and financial institutions which have, unwittingly or otherwise, helped corrupt individuals acquire assets and move suspicious wealth.’
Chief executive Daniel Bruce said: ‘These revelations are a damning indictment of the system that is supposed to prevent the UK and other financial centres becoming havens for dirty money.
‘The Government should respond rapidly to this significant investigation in order to demonstrate that the UK is serious about tackling dirty money.
‘We know the solutions exist; for example by bringing forward reform of corporate liability laws to hold banks accountable for money laundering failings and expediting the legislation to overhaul the UK company law.
‘As it stands, it remains far too easy for kleptocrats and criminals to launder their illicit loot using the veneer of UK companies and institutions.’
Alex Cobham, chief executive at Tax Justice Network, said: ‘As will be revealed over the coming days, many of the world’s major financial institutions have comprehensively failed to meet their own responsibilities, in the name of turning a profit – however dirty.
‘Swift and robust action is needed, including potential criminal charges, or banks will simply continue to treat the prospects of being caught and fined as a simple cost of business.’
Standard Chartered said in a statement to Reuters, ‘We take our responsibility to fight financial crime extremely seriously and have invested substantially in our compliance programmes.’
BNY Mellon told Reuters it could not comment on specific SARs. ‘We fully comply with all applicable laws and regulations, and assist authorities in the important work they do,’ the bank said.
JPM did not immediately respond to a request for comment but said in a statement to BuzzFeed that ‘thousands of employees and hundreds of millions of dollars are devoted to helping support law enforcement and national security efforts.’
Deutsche Bank said in a statement on Sunday that to 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.’
FinCen said in a statement on its website on September 1 that it was aware that various media outlets intended to publish a series of articles based on unlawfully disclosed SARs, as well as other documents, and said that the ‘unauthorized disclosure of SARs is a crime that can impact the national security of the United States.’
Representatives for the U.S. Treasury did not immediately respond to an email for comment on Sunday.