FinCEN Files: Biggest revelations from leaked bank documents

  • Leaked documents from the Financial Crimes Enforcement Network (FinCEN) were shared with news outlets.
  • They show big banks have for years engaged with dirty money with little oversight.
  • Banks named include JPMorgan Chase, HSBC, Barclays, and Deutsche Bank.
  • Here are some of the biggest takeaways from the scandal.
  • Visit Business Insider’s homepage for more stories.

Thousands of leaked documents shared with journalists have shown how some of the world’s biggest banks for years facilitated the movement of dirty money.

The documents, part of a collection of files belonging to the Financial Crimes Enforcement Network, were published on Sunday by BuzzFeed News and the International Consortium of Investigative Journalists.

FinCEN is in charge of compiling “suspicious activity reports” sent to it by banks that suspect financial wrongdoing by their clients. SARs do not constitute evidence of wrongdoing, but they are a way to alert regulators and law enforcement.

The documents are shared with law-enforcement and financial-intelligence groups around the world. The agency does not require banks to stop dealing with clients who prompted SARs.

The BuzzFeed News and ICIJ report said banks including JPMorgan Chase, HSBC, and Deutsche Bank engaged with and facilitated the movement of criminal money even after raising suspicions.

The files detail movements and transactions over almost two decades, starting in 2000 and continuing into 2017.

Many of the banks named in the report have responded in statements to BuzzFeed News.

Here are some of the biggest revelations to come out of the bombshell report:

5 banks processed more suspicious money than anyone else in the leak

The names of five big banks came up more than any others in the documents.

Of the $2 trillion in suspicious transactions, $1.2 trillion moved through Deutsche Bank.

Nearly all the rest was processed by JPMorgan, Standard Chartered, Bank of New York Mellon, and Barclays.

Several other banks, including Société Générale, HSBC, State Street Corporation, Commerzbank AG, and China Investment Corporation, also processed billions.

European bank shares — already under pressure from a resurgence of the coronavirus — have tumbled since the report was published.

Barclays shares were last down 5.4% on London’s FTSE 100 index, at their lowest since late April, while Deutsche Bank shares were down nearly 9% in Frankfurt, at their weakest since late May.

The leaks were 0.02% of total SARs

Reporters saw more than 2,100 leaked SARs — but this is just the tip of the iceberg.

According to the ICIJ, more than 12 million SARs were filed with FinCEN from 2011 to 2017, meaning those in the leak are 0.02% of the total.

HSBC moved money for the WCM777 Ponzi scheme that victimized thousands

The files show that HSBC allowed fraudsters involved with WCM777, an $80 million Ponzi scheme, to move money around the world, the BBC reported.

In 2013 and 2014, the bank moved fraudsters’ money from the US to Hong Kong, despite having promised to clamp down on money laundering, the outlet reported.

In 2012, after a US Senate investigation, the bank was fined a record $1.9 billion for its role in channeling cash for what the investigators called “drug kingpins and rogue nations,” the BBC reported at the time.

But the following year, fraudsters working with WCM777 were able to move more than $15 million through HSBC, despite warnings that it was a scam, the leaked documents show.

At the time of the notice, WCM777 was barred from conducting business in three states.

The Ponzi scheme targeted poor communities in various nations and victimized thousands of Asian and Latino immigrants, according to the BBC and BuzzFeed News.

HSBC told the BBC it has always followed its legal duty in reporting such activities.

Read the full report from the BBC here.

Banks processed millions for the family of a Kazakh politician wanted by Interpol

JPMorgan Chase, along with Bank of America, Citibank, American Express, and others processed huge transactions linked to a Kazakh politician wanted by Interpol, BuzzFeed News reported.

The family of Viktor Khrapunov, a former mayor of Almaty, the largest city in Kazakhstan, used JPMorgan Chase to handle millions of dollars in transactions, even after Interpol issued a red notice, the outlet said.

At the time of the transactions, Khrapunov and his wife stood accused of money laundering, fraud, and the creation of an organized crime group, according to Newsweek.

They were convicted in absentia, having fled to Switzerland. They described the charges as politically motivated, BuzzFeed News reported.

Arkady Rotenberg, a Putin associate, may have used Barclays to launder money and evade sanctions

The documents suggest that a close associate of Russian President Vladimir Putin’s may have used the UK-based Barclays Bank to avoid sanctions and launder money, the BBC reported.

Arkady Rotenberg, a childhood friend of Putin’s, is among several…

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