Dirty money laundering: over 90 banks involved
Dirty money laundering: over 90 banks involved
From Deutsche Bank to JPMorgan. A round of money worth 2 trillion in 170 countries ended up in drug and weapons trafficking. In the FinCEN files investigation
Four years after the Panama Papers offshore haven scandal, “FinCEN files”, the new investigation by Buzzfeed News and the International Consortium of Investigative Journalists (ICIJ) uncovers the cards of the global banking system, which fuels, rather than stops, dirty money laundering. From Deutsche Banck to JPMorgan Chase, there are at least 90 international banking institutions with suspicious money flows, amounting to over 2,000 billion dollars, between 1999 and 2017, in 170 countries around the world. As with the Panama Papers, it all started with the revelations of a whistleblower. "Tips" that allowed us to get our hands on the data of more than 200 thousand transactions, linked to 2,100 suspicious activity reports, the so-called "Suspicious Activity Reports" (SARs). Strictly confidential reports submitted by the banks themselves to the US Treasury Department's intelligence unit, the Financial Crimes Enforcement Network, known as FinCEN.
NEW: Together with @buzzfeednews and 108 other media organizations we reveal the #FinCENFiles – our latest cross-border investigation. Using super secretive bank documents and months of reporting, we expose how banks fail to stop dirty money flows. https://t.co/hBG1poGsho
FinCEN is, in fact, the US agency responsible for combating money laundering and terrorist financing. It collects millions of Suspicious Activity Reports – at least two in 2019 – and makes them available to American law enforcement and international financial intelligence agencies. According to BuzzFeed News, part of the documents come from the US Congressional investigation into Russian interference in the 2016 presidential election. While other reports were prepared following requests to FinCEN by law enforcement agencies.
10 of the most well-known banks in the USA and Europe are in the spotlight
Ten of the most well-known banks in the US and Europe are accused of moving huge sums for drug cartels, corrupt regimes, traffickers and other international criminals. Deutsche Bank leads the way with 1.3 trillion (1,300 billion) dollars tracked. Followed by JPMorgan Chase with 514 billion, Bank of America with 384 billion dollars. In the rear are Standard Chartered with 166 billion, Bank of New York Mellon with 64 billion, Barclays with 21 billion, HBSC with 4.4 billion dollars.
The complex investigative activity, which lasted 16 months and was published online on 20 September, still sees 400 investigative journalists and data journalists active. Against 108 media partners spread across 88 countries, in Italy by L' Espresso. FinCEN files show how, despite being fined for their "misconduct", banks such as Deutsche Bank, JPMorgan Chase, HSBC, Standard Chartered and Bank of New York Mellon, have circumvented anti-money laundering regulations, continuing to move money linked to crime and illicit trafficking. Movements involving states and financial institutions from all over the world, including Italy, as each of us can verify from the database made available by the ICIJ. As ICIJ journalists reconstructed, the FinCEN files represent less than 0.02% of the more than 12 million suspicious activity reports that financial institutions filed between 1999 and 2017 alone.
If suspicious financial transactions are reported but not stopped
But how were the connections between economic transactions and global money laundering bosses reconstructed? Let's start from the fact that banks have great power, on paper: that of being able to intervene and stop suspicious financial transactions. But, as the various lines of investigation reveal, if the reports are not followed by actual repressive action, the bank, which reports to FinCEN a transaction that could facilitate an illicit activity, does nothing but immunize itself and its managers from criminal proceedings. The suspicious activity notice, in fact, effectively gives the reporting bank a free pass to continue moving money and collecting proceeds. Therefore, as the investigative teams of Buzzfeed news and ICIJ write, the laws that were supposed to stop financial crime have instead allowed it to flourish.
In 2019 alone, American financial institutions sent over two million SARs. According to statements collected by Buzzfeeds News, US government investigators have admitted that the volume of communications is such that it has been impossible to investigate all cases. The number of complaints filed each year has grown, while FinCEN's staff has shrunk, by more than 10 percent over the past decade, according to official U.S. Treasury reports. In 2017, FinCEN's acting director testified before Congress how the agency had trouble hiring new staff due to "security concerns."
From Deutsche Bank to the main lines of investigation
In the global map of dirty money laundering, the lines of investigation start from the USA and reach central Europe. From the reconstructions of BuzzFeed News and ICIJ, Deutsche Bank has ignored anti-money laundering regulations for years and, indeed, played a fundamental role in the $230 billion illicit proceeds scandal, which now engulfs the Estonian headquarters of Danske Bank. Despite dozens of suspicious transactions, Deutsche Bank processed at least 2.6 billion dollars without batting an eyelid and without filing any complaints.
Precisely on the Estonian track, connections emerge that bring to mind the mechanisms that public opinion discovered thanks to the Panama Papers. Danske Bank Estonia executives, instead of preventing money laundering, operated a joint-stock company that helped customers open accounts in the name of limited liability companies. Shell companies known as “limited liability partnerships” (LLPs), or “limited partnerships” (LPs) in the UK. Companies that had no other purpose than to hide the identity of who really owned the money (in this case it was L'Espresso that provided the documents to ICIJ).
German prosecutors have abandoned their criminal investigation into staff at Deutsche Bank suspected of helping launder dirty money from Russia and neighboring countries through the tiny Estonian branch of Denmark's largest lender, Danske Bank. https://t.co/E0K4gG5CJs