A leak of several thousand documents have revealed £1.55trn ($2trn) worth of potentially fraudulent transactions at global banks including JPMorgan and HSBC.
The leaked documents contain 2,000 suspicious activity reports (SARs) filed with the US government’s Financial Crimes Enforcement Network (FinCEN).
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SARs are filed by banks and financial institutions when they suspect a client to use their services for criminal activity.
BuzzFeed News first obtained these leaked documents, dubbed as “the FinCEN files” and shared it with the International Consortium of Investigative Journalists (ICIJ).
The leak exposes several banks in the US that served high-risk individuals around the world, despite the US government placing them under sanctions.
ICIJ said that the documents involve transactions dated from 1999 to 2017.
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By GlobalDataJPMorgan
The SARs named political strategist Paul Manafort as one of the several individuals or entities in the collective trillion-dollar scam.
ICIJ said that banks flagged suspicious activities related to Manafort since 2012.
In 2017, JPMorgan filed a report on a $300m suspicious transaction entailing Cyprus’ shell companies and Manafort.
Details regarding another $1bn in wire transfers by JPMorgan also surfaced, which were linked to an alleged Russian organised crime boss named Semion Mogilevich.
HSBC
Sources suggest that the British lender HSBC, through its accounts, allowed several criminals to transfer millions of dollars from a Ponzi scheme, albeit identifying their fraud.
The documents also named several other banks around the world.
Deutsche Bank
German lender Deutsche Bank had filed the highest number of SARs with the ICIJ, than any bank globally, accounting for a total of $1.3trn in fraudulent transactions.
The bank filed 100 SARs between 2012 and 2015.
Back in 2017, the US and the UK fined Deutsche Bank $630m for one Russian mirror trading scandal.
This scandal, for which the bank is still awaiting penalty from the US Department of Justice (DOJ), was the one with most significant SARs.
Regardless of the number of SARs filed, the bank kept on allowing Russian clients to buy roubles and sell identical securities in currencies, including dollars, in London.
Deutsche Bank said: “The Supervisory Board diligently exercised its oversight responsibility with regards to the mirror trading matter. Consequences have been taken where and as appropriate, including on the management board level.”
According to ICIJ, the UK’s Financial Conduct Authority (FCA) was about to fine the bank £1.7bn, however, the watchdog reduced this number to £163m.
Barclays
Back in 2008, the UK banking major opened an account for a firm called Advantage Alliance, which conducted $60m of suspicious transactions, including a purchase of a René Magritte painting for $7.5m.
Barclays found its links to billionaire Arkady Rotenberg. It closed the account in 2016 and filed several SARs about other accounts linked to Rotenberg.
Several more banks were flagged for suspicious activities in Asian countries including India and Singapore.
The FinCEN received 3,201 SARs related to Indian entities, involving 44 lenders for money laundering, amounting to $1.53bn in such transactions.
Some of these “correspondent banks” include Punjab National Bank (PNB), Kotak Mahindra Bank (KMB), HDFC Bank, Canara Bank, IndusInd Bank and Bank of Baroda, among others.
The Monetary Authority of Singapore (MAS) said that it is “closely studying” the media reports regarding banks in the country flagged for such activities to the US authorities.
The FinCEN files names local lenders DBS, OCBC and UOB based on a sample of transactions extracted from the leaked documents.
Other data leaks
In 2016, a massive data leak called the “Panama Papers” revealed the secret dealings of the world’s wealthy including the heads of states.
The documents were leaked from the database of law firm Mossack Fonseca.
The leak contained 11.5 million files detailing financial information on over 214,488 offshore entities.
A year later followed the leak of another 13.4 million files known as the “The Paradise Papers”.
Majority of the documents came from offshore law firm Appleby and exposed tax dealings of multinational companies including Apple, Uber and Nike.
