Banks’ Airtight Compliance Procedure Involves Laundering Money, Sending Report That Won’t Be Read, Collecting Fees, Laughing All The Way Back To Themselves



As we and everyone else who looks at them have noted, banks could really do a much, much better job of detecting, reporting and preventing money laundering. Well, BuzzFeed has got its hands on 2,100 suspicious activity reports filed by those banks, demonstrating that they have a pretty good handle on how and when $2 trillion worth of money laundering is happening. It’s just that, aside from filing those SARs, they don’t do anything about it, because, well, they don’t have to.

The Financial Crimes Enforcement Network, or FinCEN, is the agency within the Treasury Department charged with combating money laundering, terrorist financing, and other financial crimes. It collects millions of these suspicious activity reports, known as SARs…. What it does not do is force the banks to shut the money laundering down….

For more than a year, BuzzFeed News and its partner news organizations across the world mined the information on these tens of thousands of pages to map more than 200,000 transactions…. Western banks could have blocked almost any of them, but in most cases they kept the money moving and kept collecting their fees.

OK, so that’s not exactly what we were expecting or hoping for back when FinCEN piously warned against the unlawful disclosure of SARs to journalists, but there’s some fun stuff all the same.

Experts say, some banks treat SARs as a kind of get-out-of-jail-free card, filing alerts about a huge array of transactions without actually moving to halt them. In some cases, banks filed numerous reports on the same clients, detailing their suspected crimes over the course of years while continuing to welcome their business.

By December 2013, JPMorgan Chase had filed at least eight SARs on accounts and companies controlled by [Paul] Manafort, flagging more than $10 million, according to a FinCEN research report. Manafort, who went on to become Trump’s campaign chair, was convicted of bank and tax fraud in 2018….

When investigators for HSBC’s American operations asked their colleagues in Hong Kong for the name of the person who owned Trade Leader, a company that had moved more than half a billion dollars through the bank in less than two years, the answer they got was “None available.” The company would reportedly emerge as an important hub in the so-called Russian Laundromat, a sprawling scheme in which wealthy Russians, facilitated by banks, secretly moved their money into the West….

In 2012, HSBC faced a historic crisis. After permitting narcotraffickers to launder money and conducting business in off-limits countries such as Sudan and Myanmar, the bank was fined $1.9 billion. It promised to change its ways, and to hold it to that promise, the government installed an independent monitor to keep close watch. But the FinCEN Files investigation shows HSBC continued banking, and profiting from, the same kinds of customers that got it in trouble in the first place, such as a Panamanian import-export firm that the Treasury Department later said was laundering money for drug kingpins.



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