Investigation

Global Banks linked to alleged movement of ‘illicit funds’

FinCEN Files put the spotlight on HSBC, Standard Chartered, JPMorgan Chase, Deutsche Bank and Bank of New York Mellon

Global banks such as HSBC and Standard Chartered have been caught up in moving massive amounts of alleged “illicit funds” during a two-decade period, a major international investigation has revealed.

The media reports were based on leaked suspicious activity reports or SARs filed by banks and other financial firms with the US Department of Treasury’s Financial Crimes Enforcement Network, known as FinCEN, according to the Reuters news agency.

Thousands of SARs were obtained by BuzzFeed News and shared with the International Consortium of Investigative Journalists (ICIJ) and other media organizations such as the BBC

“The leaked documents, known as the FinCEN Files, include more than 2,100 suspicious activity reports filed by banks and other financial firms, with the Department of Treasury’s Financial Crimes Enforcement Network. The agency is an intelligence unit at the heart of the global system to fight money laundering,” the ICIJ reported on its website.

Transactions worth US$2 trillion

The files contained information about more than US$2 trillion worth of transactions between 1999 and 2017, which the ICIJ said were flagged by internal compliance departments of financial institutions as suspicious, Reuters pointed out.

As for the SARs, they are not necessarily proof of wrongdoing, and the ICIJ reported the leaked documents were a tiny fraction of the reports filed with FinCEN.

The International Consortium of Investigative Journalists and BuzzFeed News unveiled their findings into major global banks. Image: Screengrab

“Though a vast amount, the $2 trillion in suspicious transactions identified within this set of documents is just a drop in a far larger flood of dirty money gushing through banks around the world,” the ICIJ said.

Five global banks that appeared the most often in the documents were HSBC, JPMorgan Chase, Deutsche Bank, Standard Chartered and Bank of New York Mellon, according to the ICIJ

“The FinCEN Files offer unprecedented insight into a secret world of international banking, anonymous clients and, in many cases, financial crime,” the ICIJ added.

Response to allegations

In response to the allegations, HSBC told Reuters 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.”

A statement from Standard Chartered stated: “We take our responsibility to fight financial crime extremely seriously and have invested substantially in our compliance programs.”

BNY Mellon declined to comment on specific SARs. “We fully comply with all applicable laws and regulations, and assist authorities in the important work they do,” the American bank said.

A similar statement was released by JPMorgan and said it has “thousands of people and hundreds of millions of dollars dedicated to this important work,” adding it had “played a leadership role in anti-money laundering reform.”

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