buzzfeed--2020-09-24--Documents Show Deutsche Bank’s Top Executives Were Warned It Had A Dirty Money Problem. Then A $10 B

Documents Show Deutsche Bank’s Top Executives Were Warned It Had A Dirty Money Problem. Then A $10 Billion Scandal Broke.

When the $ 10 billion mirror trading scandal was exposed , little emerged about who its victims were or how much Deutsche ’ s executives knew .
The FinCEN Files investigation shows how deep the rot went .
When Robert Meltzer , who runs gyms for children in Los Angeles , found that more than $ 60,000 in payroll taxes — half a year ’ s worth — had gone missing in 2013 , it was too late .
When something similar happened to Stanford Media Group , a company that sold CDs and DVDs online , Mark Gilula said @ @ @ @ @ @ @ .
He said the stress contributed to his heart attack .
And when Maureen Sullivan , an architect , went looking for answers about the $ 111,000 that evaporated from her accounts , she said her inquiries with the police “ basically went into a black hole.
” What none of these small business owners could have known was that their losses were linked to one of the most infamous international banking scandals on record .
The bookkeeper who handled their payroll allegedly embezzled their money and injected it into a notorious scheme @ @ @ @ @ @ @ , and drug cartels .
The participants laundered $ 10 billion of illicit money into nice clean cash .
It all happened with the help of Deutsche Bank , Germany ’ s biggest financial institution and one of the biggest lenders to Donald Trump .
But when the enormous scandal broke , Deutsche blamed it on a few middle-level staffers in its Moscow office , paid a fine , and got back to business .
The FinCEN Files investigation reveals that Deutsche managers , including top executives , had direct knowledge for years @ @ @ @ @ @ @ vulnerable to money launderers .
Documents show two warnings sent to committees that included Paul Achleitner , Deutsche ’ s chair , and one sent to the bank 's supervisory board .
Deutsche ’ s problems were so striking they prompted Bank of America to file a confidential alert known as a suspicious activity report , or SAR , to the US government .
Bank of America employees had visited Deutsche ’ s London office to discuss worries about Russian money laundering .
They were stonewalled when a Deutsche manager interrupted their meeting @ @ @ @ @ @ @ .
Bank of America found the situation troubling enough that it raised the matter with Achleitner , according to its filing .
Another top Deutsche executive , Christian Sewing , ran the audit division when one of its teams gave the Moscow office a clean bill of health , despite evidence that it could not even produce a list of its clients , let alone verify that they were who they said they were .
Sewing is now Deutsche ’ s CEO .
In all , more than 100 internal alerts were raised @ @ @ @ @ @ @ the Russian mirror trade scandal between 2012 and 2015 .
During these years , some of the world ’ s worst criminals used the network to move dark money around the globe , with the help of shell companies and corrupt financiers .
Business owners like Meltzer , Gilula , and Sullivan were left to pick up the pieces .
The wide range of criminal activity linked to the mirror trades has never before been revealed .
The FinCEN Files investigation includes thousands of closely held US Treasury documents — among them , @ @ @ @ @ @ @ shared with the International Consortium of Investigative Journalists and more than 100 newsrooms around the world .
This investigation is also based on confidential bank documents obtained by the German newspaper Süddeutsche Zeitung , a partner in this project .
By law , banks must file SARs to the Treasury Department 's Financial Crimes Enforcement Network , or FinCEN , when they spot activity that bears the hallmarks of money laundering or other financial misconduct .
SARs by themselves are not evidence of a crime , but they can support investigations and intelligence @ @ @ @ @ @ @ ’ s share price has plummeted under the weight of scandal after scandal .
In the last decade , the bank has paid fines for everything from evading sanctions against Iran and Myanmar to rigging foreign exchange markets to doing business with Jeffrey Epstein .
And it has come under scrutiny for lending Trump hundreds of millions of dollars despite his history of defaulting on loans .
The bank , responding to questions raised by this investigation , said it has acknowledged “ past weaknesses ” and “ learnt from our mistakes , @ @ @ @ @ @ @ dollars to bolster its defenses against financial crimes .
“ We are a different bank now , ” a Deutsche spokesperson said in a written response .
The spokesperson said Sewing was not personally involved in the review of the Moscow office and disputed aspects of Bank of America ’ s written account to the government , including the assertion that Achleitner met with an executive from that bank .
The $ 10 billion mirror trading scheme remains one of Deutsche ’ s darkest stains .
While it had many tentacles , at @ @ @ @ @ @ @ launderers who controlled a network of anonymous companies around the world .
They would buy shares in Russia and sell the stock to one of the European shell companies they owned .
As the network pinged money across the globe , it turned the rubles into dollars and other currencies .
The system had one other great advantage : It allowed criminals to move their ill-gotten gains undetected .
To make it all happen , the perpetrators needed a Western bank to work with them .
They found one in Deutsche .
It @ @ @ @ @ @ @ was involved , but prosecutors said traders in its Moscow office were motivated by “ greed and corruption ” and that one supervisor had apparently been bribed to facilitate the trades .
The companies that moved the money were some of Deutsche Russia ’ s most active clients , at times generating bigger commissions for the bank than any of its other customers in Russia .
In one confidential letter from March 2016 , never before revealed , the UK ’ s financial regulator privately scolded Deutsche ’ s willingness to take on @ @ @ @ @ @ @ financial crime risks.
” It cautioned that “ leadership on financial crime had been lacking for a considerable period of time.
” But when the agency spoke about the matter publicly , it exonerated senior managers , saying they “ were not aware of the suspicious trading ” and the failings at the bank had been committed “ negligently , rather than deliberately or recklessly.
” The regulator initially considered a fine of £1.7 billion for the scandal , but decided that would be “ disproportionately high ” and reduced it to £163 @ @ @ @ @ @ @ imposed a higher fine of $ 425 million but took the occasion to praise the bank ’ s leaders for dealing with the issue in a “ serious manner and timely fashion.
” Among the recipients of cash from the mirror trades , the FinCEN Files investigation has found , was a company the US government says is part of the Russian mafia .
Its owner has been identified as a liaison for Vladislav “ Blonde ” Leontyev , described by US authorities as a Russian mobster and a high-level narcotics trafficker .
@ @ @ @ @ @ @ denied any involvement in the mirror trades or other criminal activity .
Between March 2013 and April 2014 , nearly $ 50 million in illicit funds also went to a company that is part of the Khanani money laundering organization , whose clients include Hezbollah associates , the Taliban , and Mexican drug cartels , according to the US government .
( The group ’ s head , Altaf Khanani , was sentenced in 2017 to 68 months in prison after he laundered more than $ 1 million during an undercover Drug Enforcement @ @ @ @ @ @ @ supplier in Brooklyn , where the manager was found guilty of laundering money for cyberscammers , also received cash from the mirror trades .
So did a New Jersey telecoms operation that did business with shell companies linked to organized crime , the Syrian weapons program , and a notorious oligarch , SARs show .
Money from a looted Russian bank where Vladimir Putin ’ s cousin sat on the board was also filtered into the network , records show .
All those funds were funneled into the money laundering operation along with @ @ @ @ @ @ @ consulting firm whose owner allegedly defrauded 141 small businesses across Southern California .
The victims included churches and not-for-profit organizations .
The man behind the fraud fled the US and the money has never been recovered .
The saga of the mirror trades is not yet over for Deutsche .
In its most recent annual report , Deutsche said that the Department of Justice continues to investigate , and that the bank had set aside money in case of future fines .
Then , in November 2012 , an even brighter red flag @ @ @ @ @ @ @ s owners , a Ukrainian financier named Alexander Perepilichnyy , dropped dead during a jog outside his home on the outskirts of London .
Two weeks after he died , it was revealed that Perepilichnyy was linked to a multimillion-dollar tax fraud and had fled Russia , blowing the whistle on the scam .
A few weeks later , the documents obtained by Süddeutsche Zeitung show , Deutsche ’ s anti–money laundering software flagged Financial Bridge for its “ high-risk transactions.
” But the alert went to an office in India where staff @ @ @ @ @ @ @ confidential regulatory documents show .
Financial Bridge ’ s explanation for its transactions — that they were for “ investment activities ” — was deemed adequate .
By 2013 , Deutsche ’ s own internal reviews were beginning to identify crucial weaknesses in the bank ’ s procedures for combating financial crime .
To guard against financial crimes , banks have policies to “ know your customer , ” which means researching clients before taking them on .
But an internal review focusing on know-your-customer protocols in the Moscow office found that bankers @ @ @ @ @ @ @ even neglecting to determine if they were known criminals .
The Moscow bankers could not even produce a list of who their clients were .
By the start of 2016 , the volume of Russian money flowing into the US financial system was raising alarms at Bank of America .
A team of experts from the bank flew to Deutsche ’ s London office seeking answers .
In a Jan. 11 meeting with Deutsche , the Bank of America team began to gain some insights as the head of Deutsche ’ s business @ @ @ @ @ @ @ that “ his staff had to navigate to perform enhanced due diligence on clients , ” the SAR says .
But the meeting was interrupted when one of Deutsche ’ s managing directors arrived .
He told the Bank of America investigators they were not authorized to talk to anyone in London and asked them to leave .
The SAR says that the matter was escalated within Bank of America , with one of its senior managers “ scheduled to meet with Paul Achleitner ” in a few days .
The SAR adds @ @ @ @ @ @ @ be addressed ” with the bank ’ s CEO at the time , John Cryan .
On Jan. 29 , a Deutsche executive overseeing compliance gave Bank of America officials assurances that their questions would be answered .
On Feb. 11 , Bank of America filed its SAR on Deutsche .
It wrote to the government that it did not yet have “ sufficient information to assess the adequacy of the Deutsche Bank ’ s current control environment.
” Bank of America declined to comment for this story .
Asked about the SAR @ @ @ @ @ @ @ review of the situation indicates that the events did not take place as implied.
” It added : “ It would not have been the place of Paul Achleitner to get involved managing the interactions with Bank of America , nor do we have any record of him doing so.
” The bank declined to make Achleitner available for an interview .
Weeks later , the Financial Conduct Authority , the UK financial regulator that had been conducting a confidential review of Deutsche , sent a set of disturbing findings to the bank @ @ @ @ @ @ @ on financial crime had been lacking for a considerable period of time ” at the bank and that managers had put the pursuit of profit above its responsibilities to fight money laundering .
It said it found evidence of “ financial crime risk being overridden by commercial drivers and in some cases a willingness to take on very profitable clients , regardless of financial crime risks.
” The regulator said there was a “ significant risk ” that money laundering at the bank was “ going unreported or undetected.
” To those within @ @ @ @ @ @ @ news .
In October 2015 , Deutsche had hired consultants from the accounting giant Deloitte to figure out what had gone wrong .
Deloitte interviewed staffers , combed through emails , and examined trading data .
The bank laid the blame on Tim Wiswell , an American who ran the Deutsche Moscow trading desk .
But according to a copy of the Deloitte report obtained by Süddeutsche Zeitung , there were systemic failings at the bank .
Going into detail on the Moscow audit , the report described how the team had given @ @ @ @ @ @ @ auditors hadn ’ t properly tested the office ’ s money laundering prevention system .
The report concluded that audits conducted by the division had “ severe shortcomings ” from 2012 onward .
Sewing , while not named in the report , was head of audit at the bank from June 2013 to December 2014 .
He then joined the bank ’ s management board , where his responsibilities included the audit division for another six months .
The report also did not name Achleitner specifically .
But it described instances when concerns @ @ @ @ @ @ @ to board committees on which he sat .
The problem of understaffing was raised repeatedly , and Deloitte concluded that the bank ’ s compliance teams had been “ undermined by limited allocated resources.
” Deloitte also found that the bank ’ s transaction monitoring software had issued 108 alerts about the mirror trading companies between 2011 and 2015 .
Nonetheless , during that time Deutsche kept the transactions moving .

When Robert Meltzer, who runs gyms for children in Los Angeles, found that more than $60,000 in payroll taxes — half a year’s worth — had gone missing in 2013, it was too late.
When something similar happened to Stanford Media Group, a company that sold CDs and DVDs online, Mark Gilula said he was forced to lay off employees. He said the stress contributed to his heart attack.
And when Maureen Sullivan, an architect, went looking for answers about the $111,000 that evaporated from her accounts, she said her inquiries with the police “basically went into a black hole.”
What none of these small business owners could have known was that their losses were linked to one of the most infamous international banking scandals on record.
The bookkeeper who handled their payroll allegedly embezzled their money and injected it into a notorious scheme used by crime bosses, terrorist financiers, and drug cartels. The participants laundered $10 billion of illicit money into nice clean cash.
It all happened with the help of Deutsche Bank, Germany’s biggest financial institution and one of the biggest lenders to Donald Trump. But when the enormous scandal broke, Deutsche blamed it on a few middle-level staffers in its Moscow office, paid a fine, and got back to business.
The FinCEN Files investigation reveals that Deutsche managers, including top executives, had direct knowledge for years of serious failings that left the bank vulnerable to money launderers. Documents show two warnings sent to committees that included Paul Achleitner, Deutsche’s chair, and one sent to the bank's supervisory board.


buzzfeed--2020-09-24--Here Is How Banks Have Responded To The FinCEN Files Investigation

“ This is not new information to us or our regulators .
The presented issues which relate to Deutsche Bank date back to the years prior 2016 , we ourselves reported them to our regulators and authorities and they have been to a larger part reported on by the media .
We acknowledged past weaknesses in our control environment , we apologized for this and accepted our respective fines .
Most importantly : we learnt from our mistakes , systematically tackled the issues and made changes to our business perimeter , our controls , and our personnel .
Many of @ @ @ @ @ @ @ which regulators and authorities lauded the bank ’ s cooperation and remediation publicly .
We have engaged in disciplinary consequences including on management board level when the facts warranted it .
We worked and still work constructively together with the authorities .
We have invested almost $ 1 billion in improved controls , trainings and operational processes , and have increased our anti-financial crime team to over 1,500 people .
We plan to continue to increase this number further .
We are a different bank now . ''
On SARs : “ Legal @ @ @ @ @ @ @ discussing potential SARs .
This would be a criminal violation of US ( and other ) law .
Banks file SARs on a regular basis in accordance with our legal obligations and as part of our partnership with regulators and law enforcement to protect the global financial system .
We thus help the authorities to catch and prosecute those engaged in criminal activity .
Deutsche Bank is actively monitoring for suspicious conduct and shares relevant findings with the authorities.
” “ The fight against financial crime , money laundering and capital flight has @ @ @ @ @ @ @ financial institutions alike .
The world ’ s leading financial institutions , including Deutsche Bank , have invested billions of dollars to more effectively support authorities in this effort .
Naturally , this leads to increased detection levels .
At Deutsche Bank we have devoted significant resources to strengthening our controls and we are very focused on meeting our responsibilities and obligations .
This also includes implementing risk mitigants and , where appropriate , off-boarding customers and correspondent banking relationships .
The ICIJ has reported on a number of historic issues .
Those @ @ @ @ @ @ @ to our regulators .
The issues have already been investigated and led to regulatory resolutions in which the bank ’ s cooperation and remediation was publicly recognized .
Where necessary and appropriate , consequence management was applied .
The bank has devoted significant resources strengthening its controls and we are extremely focused on meeting our responsibilities and obligations .
To the extent that information referenced by the ICIJ is derived from SARs , it should be noted that this is information that is pro-actively identified and submitted by banks to governments pursuant to @ @ @ @ @ @ @ potential issues , not proven facts.
” “ We take our responsibility to fight financial crime extremely seriously and have invested substantially in our compliance programmes .
Standard Chartered has nearly 2,000 staff worldwide dedicated to preventing , detecting and reporting suspicious transactions , and all staff are trained in sanctions and anti-money-laundering compliance .
In addition to investing to ensure we meet our regulatory obligations , we are active in public-private partnerships to help fight financial crime and raise industry standards .
As a result of the investments and improvements we have @ @ @ @ @ @ @ publicly acknowledged that the Group has undergone a comprehensive and positive transformation over the last several years .
`` In 2019 we monitored more than 1.2 billion transactions for potential suspicious activity and screened more than 157 million transactions for compliance with applicable sanctions requirements .
The reality of the global financial system is that there will always be attempts to launder money and evade sanctions ; the responsibility of banks is to build effective screening and monitoring systems and we work closely with regulators and law enforcement to bring perpetrators to justice.
@ @ @ @ @ @ @ commenting on most of the details in your inquiry . ''
`` You asked us about our 2014 'How We Do Business ' report and specifically about foreign correspondent banking .
As we noted in that report , we exited several hundred foreign correspondent banks while we upgraded our control environment and systems .
We acknowledged in that 2014 report that our existing AML controls needed improvement , and have since devoted considerable resources to comply with the laws and regulations governing anti-money laundering , terrorist financing and economic sanctions .
Today , @ @ @ @ @ @ @ of dollars are devoted to helping support law enforcement and national security efforts .
JPM has taken a leadership role in AML reform to drive the regime towards more proactive intelligence-led investigations and develop innovative techniques to help combat financial crime . ''
“ We do not comment on suspicious activity reporting .
All of the information provided by the ICIJ is historic and predates the conclusion of our Deferred Prosecution Agreement ( DPA ) in 2017 .
Starting in 2012 , HSBC embarked on a multi-year journey to overhaul its ability to @ @ @ @ @ @ @ jurisdictions .
During that period , the Monitor fulfilled his role of identifying issues and making recommendations for improvement , and concluded that HSBC became a safer bank each year as a result of the Bank ’ s efforts .
At the end of 2017 , the Justice Department , having received all of the Monitor ’ s reports , determined that HSBC met all of its obligations under the DPA .
HSBC is a much safer institution than it was in 2012.
” “ In 2012 , we launched our Global Standards @ @ @ @ @ @ @ place the most effective standards to combat financial crime across our operations globally .
As part of this effort , we designed and implemented new , globally consistent policies on AML and sanctions that often extend beyond the requirements of local laws and regulations .
Among other steps , we hired experienced senior personnel to lead the effort and significantly increased our financial crime compliance capabilities ; we put in place a robust investigations capability ; we improved and expanded our financial crime compliance training initiatives ; and we upgraded or replaced key @ @ @ @ @ @ @ 1bn spent since 2015 .
We also increased the number of staff in our financial crime compliance function from a few hundred in 2012 to around 5,000 in 2017 .
In parallel with our reforms , we dramatically reduced our financial crime risk profile , exiting jurisdictions , curtailing business in other jurisdictions and closing the accounts of existing customers .
`` The goal of any financial crime compliance programme is to detect and prevent financial crime .
One way we do that is through transaction monitoring and sanctions screening .
Each month @ @ @ @ @ @ @ across 236 million accounts for signs of money laundering and financial crime .
In addition , we screen approximately 131 million customer records and 40 million transactions monthly for sanctions exposures .
During 2019 , we filed almost 50,000 suspicious activity reports to law enforcement and regulatory authorities where we identified potential financial crime .
`` Though we have made significant improvements in our financial crime compliance programme , we are continually seeking ways to improve .
That includes investing in and developing new technologies that we believe will enable us to make @ @ @ @ @ @ @ financial crime by allowing us to detect potentially illicit conduct with greater precision than traditional technologies allow .
`` Our global social network analytics platform , which we launched in 2018 , enables us to identify links between different customers and transactions , making it easier to see where there might be criminal networks .
In 2019 , the platform won two industry awards : the Celent Model Bank Award for Risk Management and The Banker ’ s Tech Project Award for Compliance .
In August 2019 , we became the first bank @ @ @ @ @ @ @ screen all our trade finance transactions for potential signs of financial crime.
” '' 1 .
Financial crime weakens financial institutions and we have a shared interest , in addition to our legal obligations , to prevent it .
The potential financial , legal , regulatory and reputational damage to any institution from financial crime is intense .
`` 2 .
Suspicious Activity Reports ( SARs ) are a key part of the process by which law enforcement agencies gather evidence on possible financial crime matters .
In common with other banks , @ @ @ @ @ @ @ other similar reports globally each year – this is a common and required practice in the financial services industry .
`` 3 .
Financial institutions must file SARs on any activity that appears suspicious .
SARs are not however themselves evidence of criminal conduct and simply reflect a snapshot taken at a particular point in time of the information then available .
In the majority of cases , we continue to investigate and monitor account activity after SARs are filed , at times working in conjunction with law enforcement agencies .
In most @ @ @ @ @ @ @ SARs are filed .
`` 4 .
Financial crime is , by its nature , complex and difficult to detect .
We analyse information about our clients and their activities over time .
Criminal activity which may seem obvious with hindsight is often only uncovered as a result of careful evidence gathering after the event in question has occurred or after a SAR has been filed .
`` 5 .
If we conclude we have financial crime concerns , we take appropriate action and have done so in numerous cases over the years @ @ @ @ @ @ @ client relationships is not something we take lightly .
Given the filing of a SAR is not itself evidence of any actual wrongdoing , we would only terminate a client relationship after careful and objective investigation and analysis of the evidence , balancing potential financial crime suspicions with the risk of ‘ de-banking ’ an innocent customer and our obligation to treat customers fairly .
`` 6 .
You will be aware that there are various initiatives to improve the degree of transparency around how corporates and other structures hold money around the @ @ @ @ @ @ @ by the major banks and they should make the process of due diligence on clients a lot easier .
`` 7 .
U.S. criminal law prohibits the unauthorised disclosure of SARs or information about SARs .
We are therefore not permitted to comment on whether a SAR has been filed , or on the contents of any SAR that may have been filed , even when the SARs in question may have been publicly disclosed .
We are also not permitted to comment on individuals or businesses , including to confirm whether they @ @ @ @ @ @ @ We are therefore unable to comment on the specific points in your letter .
`` 8 .
But for the avoidance of doubt , we believe that we have complied with all our legal and regulatory obligations including in relation to U.S. sanctions .
We would also refer you to the report by the U.S. Senate Permanent Subcommittee of Investigations entitled 'The Art Industry and U.S. Policies that Undermine Sanctions ' , published on 29 July 2020 .
That report covers many of the issues raised in your letter and highlights the extensive @ @ @ @ @ @ @ also our significant cooperation with relevant authorities . ''
“ We can not comment specifically on these matters as they are part of ongoing investigations by the authorities .
However , as we have previously said , it is clear that we should have never had that portfolio of non-resident customers .
It is also clear that we were too slow in realising the extent of the issues and to close it down .
Combating financial crime and money laundering is a key priority for Danske Bank .
Overall , we are now @ @ @ @ @ @ @ combating financial crime and money laundering than when the situation in Estonia developed between 2007 and 2015 and have terminated the non-resident portfolio of customers in Estonia .
We have significantly increased our resources dedicated to compliance and combating financial crime across the bank and have invested heavily in IT systems .
We will continue to invest in the area and strengthen the knowledge and culture of compliance across the bank to continue to improve our financial crime defences.
” '' Please understand that , due to banking secrecy and the Money Laundering @ @ @ @ @ @ @ actual or non-existing customer relationships .
`` Compliance is a high priority at Commerzbank .
Since 2015 , we have invested a total of more than 800 million Euros in the area of compliance , thereby strengthening the global compliance management system in a targeted effort .
We use this to prevent and uncover illegal activities .
At the same time , we have provided targeted training for our employees and significantly increased the number of employees .
`` The fact that we take compliance seriously is also demonstrated by the fact that @ @ @ @ @ @ @ monitor used by U.S. authorities within a short period of time .
`` We use the findings from monitoring transactions and customers to further reduce our risks .
`` Suspicious transactions are reported to the relevant authorities as part of our regular transaction monitoring .
`` As early as 2013 , we discontinued our global banknote trading activities , i.e .
the supply and safekeeping of banknotes , due to business policy considerations .
In addition , we have significantly reduced the number of international partner and correspondent banks since 2015 .
Apart @ @ @ @ @ @ @ , regulatory requirements played an important role in this context .
“ Since 2015 we have invested extensively in our compliance and are implementing the regulatory requirements .
The number of international partner and correspondent banks of Commerzbank is currently in the low four-digit range .
Please understand that we will not comment any further.
” “ First of all , we would like to stress , that VEB.RF Group companies have never been involved in any illegal activities .
We should also note that we have never been approached by U.S. ( @ @ @ @ @ @ @ to the allegations made in your letter , although some of them date back a decade .
`` According to your letter , the investigation is based on 'thousands of suspicious activity reports ' ( SARs ) .
We note that unauthorized disclosure of SARs is a serious crime .
To that end we would point you to a statement by the Financial Crimes Enforcement Network made in response to information about various media intending to publish a series of articles based on unlawfully disclosed SARs and other sensitive US government documents .
@ @ @ @ @ @ @ that 'the unauthorized disclosure of SARs is a crime that can impact the national security of the United States , compromise law enforcement investigations , and threaten the safety and security of the institutions and individuals who file such reports ' .
`` Moreover , we can not verify the authenticity of the SARs that you have presented in your request , as there has never been any similar requests from the US authorities , any public or private body .
Given the serious issues raised by the illegal disclosures of the SARs @ @ @ @ @ @ @ for VEB to be involved in the preparation of the article you intend to publish , including by commenting on the allegations made therein .
Nor do we think it is appropriate to publish an article containing these illegal disclosures.
” Bank of China did not respond to requests for comment .
“ Wells Fargo has robust anti-money laundering policies and procedures in place , and we follow all applicable financial crimes-related laws and regulations .
We are unable to provide any further comment.
” “ It does not make sense that the @ @ @ @ @ @ @ hid illegal activity consisted solely of Suspicious Activity Reports that those banks filed alerting law enforcement to that very activity .
Clearly , there is more to this story , but unfortunately the reporting failed to unearth it , and the banks are legally prohibited from telling their side .
In some cases , if the past is any guide , that story likely includes law enforcement asking a bank to keep open an account it has identified as suspicious so that law enforcement can track where the money is going and gather @ @ @ @ @ @ @ conviction.
” '' According to the National risk assessment of financial services UK and BSA US , all money service businesses ( MSB ) are providing high risk payment services .
Whether [ Mayzus Financial Services ( MFS ) ] provides remittances , online payment accounts , e-money services , it should expect terrorist financing , money laundering , drug and other illicit trade such as human trafficking , fraud , identity fraud , internal fraud , violation of the sanctions regime , tax evasion , internal fraud , corruption , briberry etc @ @ @ @ @ @ @ any transaction .
MFS being a money service business was naturally exposed to all types of financial crimes possible .
My point being that it was made clear by our regulatory guidance , case studies and training , that a financial institution ( FI ) such as MFS would be inevitably and constantly running into a client or a transaction which will be immediately or retrospectively linked or suspected to be linked to some sort of criminal activity .
Our regulators and partners would routinely check the ability of the company to identify @ @ @ @ @ @ @ along with the data and evidence to the designated Financial Intelligence Unit ( FIU ) , thus mitigating the risk to knowingly or unknowingly facilitate financial crime via company ’ s services .
These processes and controls were described in detail in the Anti-Financial Crime Policy of the company and approved by the Board , CEO , money-laundering reporting officer and chief compliance officer , who were to ensure the rules work .
MFS compliance budget was equal to its IT budget and was about [ one million euros ] by 2017 , @ @ @ @ @ @ @ [ Information Communications Technology ] UK anti-financial crimes diplomas , internally developed transactions monitoring systems , anti-fraud monitoring tool , data sharing API , [ Regulatory DataCorp ( RDI ) ] compliance monitoring tool , online video verification process , Regula forged documents scanning tool etc ...
The company was able to monitor transactions , identify and verify the identity of its customers .
Identified transactions which required [ Enhanced Due Diligence ( EDD ) ] , analyzed results of the EDD , made decisions whether to allow the transfer of funds , @ @ @ @ @ @ @ not .
It is a lot of work with an unclear outcome .
There is always a possibility that something would fly under the radar , but your client ’ s crimes should not theoretically ruin your business , if you acted in good faith and compliance with the regulations .
Regulated payment companies were obliged by the [ payment services and anti-laundering directives ] to identify their risks , identify and verify their customers and monitor their transactions to identify suspicious activity and report it to the respective Financial Intelligence Unit , @ @ @ @ @ @ @ National Crime Agency ] UK….MFS helped law enforcements to make few arrests by monitoring transactions , analysing the data and disclosing the data to law enforcement .
MFS have helped to arrest online and offline fraudsters , corrupt remittance agents , money launderers , and apprehend hundreds of millions of dollars worth of illicitly gained assets .
From my perspective MFS has done exactly what it was supposed to be doing . ''

Barclays:
"1. Financial crime weakens financial institutions and we have a shared interest, in addition to our legal obligations, to prevent it. The potential financial, legal, regulatory and reputational damage to any institution from financial crime is intense.
"2. Suspicious Activity Reports (SARs) are a key part of the process by which law enforcement agencies gather evidence on possible financial crime matters. In common with other banks, we typically file thousands of SARs and other similar reports globally each year – this is a common and required practice in the financial services industry.
"3. Financial institutions must file SARs on any activity that appears suspicious. SARs are not however themselves evidence of criminal conduct and simply reflect a snapshot taken at a particular point in time of the information then available. In the majority of cases, we continue to investigate and monitor account activity after SARs are filed, at times working in conjunction with law enforcement agencies. In most cases, accounts are not closed after SARs are filed.
"4. Financial crime is, by its nature, complex and difficult to detect. We analyse information about our clients and their activities over time. Criminal activity which may seem obvious with hindsight is often only uncovered as a result of careful evidence gathering after the event in question has occurred or after a SAR has been filed.
"5. If we conclude we have financial crime concerns, we take appropriate action and have done so in numerous cases over the years. As you will appreciate, terminating client relationships is not something we take lightly. Given the filing of a SAR is not itself evidence of any actual wrongdoing, we would only terminate a client relationship after careful and objective investigation and analysis of the evidence, balancing potential financial crime suspicions with the risk of ‘de-banking’ an innocent customer and our obligation to treat customers fairly.
"6. You will be aware that there are various initiatives to improve the degree of transparency around how corporates and other structures hold money around the world. We think these are supported by the major banks and they should make the process of due diligence on clients a lot easier.
"7. U.S. criminal law prohibits the unauthorised disclosure of SARs or information about SARs. We are therefore not permitted to comment on whether a SAR has been filed, or on the contents of any SAR that may have been filed, even when the SARs in question may have been publicly disclosed. We are also not permitted to comment on individuals or businesses, including to confirm whether they are or have been a client. We are therefore unable to comment on the specific points in your letter.
"8. But for the avoidance of doubt, we believe that we have complied with all our legal and regulatory obligations including in relation to U.S. sanctions. We would also refer you to the report by the U.S. Senate Permanent Subcommittee of Investigations entitled 'The Art Industry and U.S. Policies that Undermine Sanctions', published on 29 July 2020. That report covers many of the issues raised in your letter and highlights the extensive investigative work undertaken by Barclays, and also our significant cooperation with relevant authorities."


buzzfeed--2020-09-24--He Was At The Heart Of Two Of The Biggest Dirty Money Scandals In History. These Are His Secrets.

Alexander Perepilichnyy transformed himself from a money launderer to a whistleblower , and then he died .
The company he founded began a new life in the criminal underworld .
A FinCEN Files investigation .
After Alexander Perepilichnyy dropped dead while jogging outside of London , US intelligence concluded that he was likely “ assassinated on direct orders ” from Russian President Vladimir Putin “ or people close to him.
” Perepilichnyy had exposed the Magnitsky fraud , a $ 230 million tax scam by corrupt Russian government officials two years before , which became a flashpoint in US–Russian relations @ @ @ @ @ @ @ .
Perepilichnyy knew about the scam because he had facilitated it , helping to launder the stolen funds into Swiss bank accounts .
He worked with all kinds of dubious clients , from the alleged ringleader of the Magnitsky fraud to funders of Syria 's Assad regime , which has used chemical weapons on civilians .
And even after Perepilichnyy ’ s death in 2012 , a company he founded , Financial Bridge , would become embroiled in one of the largest dirty money fiascos in history .
In what became known as @ @ @ @ @ @ @ moved at least $ 10 billion over four years through some of the most prestigious banks in the world .
During that time there were at least three internal alerts at Deutsche Bank about Financial Bridge — and more than 100 for the mirror trading network .
But Deutsche never halted the flow of illicit funds .
The inside story of how Deutsche kept moving the dark money and kept raking in fees — exposed today in the FinCEN Files , a joint investigation between BuzzFeed News and the International Consortium of Investigative @ @ @ @ @ @ @ of the biggest financial crimes in history .
But it also sheds light on how illicit cash is siphoned out of the former Soviet republics and into the mainstream banking system .
Perepilichnyy and Financial Bridge serve as prime examples .
After Perepilichnyy transformed himself from a money launderer to a whistleblower , Financial Bridge did not disappear — instead it found a new life in the criminal underworld .
In October 2012 — a month before Perepilichnyy ’ s death — it was taken over by two anonymous shell companies .
Soon @ @ @ @ @ @ @ held accounts with , Danske Bank , that it had two new “ beneficial owners , ” records obtained by L ’ Espresso and ICIJ show .
One was a security consultant named Igor Marakin .
US authorities have linked a company he controls to the Russian mafia .
Financial Bridge was a key part of the mirror trading scandal .
The money laundering gang moved illicit cash for criminals and terror financiers , according to a secret US government report .
Had the banks acted forcefully in the wake of Perepilichnyy ’ @ @ @ @ @ @ @ a crimp in Financial Bridge ’ s plans and perhaps even halted one of the decade ’ s biggest financial scandals years before it unfolded .
The scheme was uncovered four years later in 2016 , and the following year authorities in the US and UK fined Deutsche Bank $ 630 million for its role .
Mirror trades are permitted under the law , but they can be manipulated for illegal purposes such as money laundering .
A spokesperson for Deutsche noted that the mirror trading network “ was criminal action by individuals @ @ @ @ @ @ @ the US and Europe had praised the bank for being “ exceptionally cooperative ” with their investigations .
Since the scandal hit , the bank has “ committed significant resources ” to stopping money laundering , the spokesperson said .
Danske Bank declined to comment on Financial Bridge , but acknowledged its own 200 billion euro money laundering scandal .
“ We were too slow in realising the extent of the issues and to close it down , ” said Philippe Vollot , its chief compliance officer , in a statement .
Marakin @ @ @ @ @ @ @ mirror trading network is laid out in a secret intelligence report , written by analysts at the US Treasury Department ’ s Financial Crimes Enforcement Network and shared by BuzzFeed News with ICIJ .
The report , marked “ Law Enforcement Sensitive , ” warned that the network “ highlights a vulnerability in the global securities market for money laundering.
” Using a mix of bank data and other intelligence , it detailed how the network allegedly conducted billions of dollars ’ worth of trades , some on behalf of “ illicit actors.
@ @ @ @ @ @ @ , according to the report , were four Russians who used a series of banks and brokerages to transfer “ billions of dollars per year ” for a “ fee of up to five percent.
” According to the report , they used Russian rubles to buy stock in large companies , then immediately transferred the shares to Europe and sold them on for dollars , euros , or pounds — allowing them to change large currency sums without the usual oversight from the authorities .
Two of the four Russians , Alexei @ @ @ @ @ @ @ in Promsberbank , where President Putin ’ s cousin Igor was a director .
Millions of dollars were stolen from the bank .
Bankruptcy documents from Promsberbank show that money had been siphoned into the mirror trading network .
Kulikov was jailed for his role in the Promsberbank theft .
Belousov ’ s whereabouts are unknown .
Neither responded to requests for comment .
Another alleged key figure in the scheme , the Russian financier Andrei Babenko , is now in Israel where he has worked in the cryptocurrency industry .
The fourth @ @ @ @ @ @ @ , according to his LinkedIn profile .
Both Babenko and Gorbatov denied involvement in the network in interviews with BuzzFeed News .
Marakin was a director or owner of at least three companies in the mirror trading network , including one that sent cash to a firm controlled by Lazar Shaybazian , who was barred from the US financial system in 2012 for his work with Vladislav “ Blonde ” Leontyev , described by US authorities as a Russian mobster and a high-level narcotics trafficker .
The government has declared that Shaybazian and @ @ @ @ @ @ @ the “ Brothers ' Circle , ” a network of Eurasian criminals linked to drugs , human trafficking , and violence around the world .
Shaybazian did not respond to requests for comment .
Leontyev said he had been wrongly targeted by US sanctions and did not know Shaybazian .
All these transactions occurred behind closed doors while another saga played out in public : Was Perepilichnyy assassinated and , if so , was that murder linked to his disclosures of Russian money laundering ?
In 2017 , a BuzzFeed News investigation revealed @ @ @ @ @ @ @ high confidence ” that Perepilichnyy was assassinated by agents linked to Russia .
The coroner ’ s investigation , which had been held up for years by UK government requests to keep information about his death secret , ultimately said that Perepilichnyy “ likely ” died from natural causes but that it was not possible to rule out that he was killed .
The proceedings were overshadowed by revelations of an inadequate police investigation into Perepilichnyy ’ s death .
The police admitted they had lost hard drives of financial data belonging to @ @ @ @ @ @ @ inquest that the drives could have shed further light on the risks Perepilichnyy faced .
Earlier this year , in a UK government review into Russian interference in the country , officials gave evidence to Parliament about a series of suspicious deaths , including Perepilichnyy ’ s .
But the evidence was withheld from the public for national security reasons .
Igor Marakin did not respond to requests for comment .
Images online show him partying and learning to fly .
●

After Alexander Perepilichnyy dropped dead while jogging outside of London, US intelligence concluded that he was likely “assassinated on direct orders” from Russian President Vladimir Putin “or people close to him.” Perepilichnyy had exposed the Magnitsky fraud, a $230 million tax scam by corrupt Russian government officials two years before, which became a flashpoint in US–Russian relations and led to sanctions against Russian officials.
Perepilichnyy knew about the scam because he had facilitated it, helping to launder the stolen funds into Swiss bank accounts. He worked with all kinds of dubious clients, from the alleged ringleader of the Magnitsky fraud to funders of Syria's Assad regime, which has used chemical weapons on civilians. And even after Perepilichnyy’s death in 2012, a company he founded, Financial Bridge, would become embroiled in one of the largest dirty money fiascos in history.
In what became known as the mirror trading scandal, money launderers moved at least $10 billion over four years through some of the most prestigious banks in the world. During that time there were at least three internal alerts at Deutsche Bank about Financial Bridge — and more than 100 for the mirror trading network. But Deutsche never halted the flow of illicit funds.
The inside story of how Deutsche kept moving the dark money and kept raking in fees — exposed today in the FinCEN Files, a joint investigation between BuzzFeed News and the International Consortium of Investigative Journalists — reveals new information about one of the biggest financial crimes in history.
But it also sheds light on how illicit cash is siphoned out of the former Soviet republics and into the mainstream banking system. Perepilichnyy and Financial Bridge serve as prime examples.


buzzfeed--2020-09-24--Deadly Terror Networks And Drug Cartels Use Huge Banks To Finance Their Crimes. These Secret Documen

Deadly Terror Networks And Drug Cartels Use Huge Banks To Finance Their Crimes. These Secret Documents Show How The Banks Profit.

Thousands of secret “ suspicious activity reports ” offer a never-before-seen picture of corruption and complicity — and how the government lets it flourish .
A huge trove of secret government documents reveals for the first time how the giants of Western banking move trillions of dollars in suspicious transactions , enriching themselves and their shareholders while facilitating the work of terrorists , kleptocrats , and drug kingpins .
And the US government , despite its vast powers , fails to stop it .
Today , the FinCEN Files — thousands of “ suspicious activity reports ” and other US @ @ @ @ @ @ @ of global financial corruption , the banks enabling it , and the government agencies that watch as it flourishes .
BuzzFeed News has shared these reports with the International Consortium of Investigative Journalists and more than 100 news organizations in 88 countries .
These documents , compiled by banks , shared with the government , but kept from public view , expose the hollowness of banking safeguards , and the ease with which criminals have exploited them .
Profits from deadly drug wars , fortunes embezzled from developing countries , and hard-earned savings @ @ @ @ @ @ @ allowed to flow into and out of these financial institutions , despite warnings from the banks ’ own employees .
Money laundering is a crime that makes other crimes possible .
It can accelerate economic inequality , drain public funds , undermine democracy , and destabilize nations — and the banks play a key role .
“ Some of these people in those crisp white shirts in their sharp suits are feeding off the tragedy of people dying all over the world , ” said Martin Woods , a former suspicious transactions investigator @ @ @ @ @ @ @ to stop financial crime have instead allowed it to flourish .
So long as a bank files a notice that it may be facilitating criminal activity , it all but immunizes itself and its executives from criminal prosecution .
The suspicious activity alert effectively gives them a free pass to keep moving the money and collecting the fees .
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 @ @ @ @ @ @ @ SARs .
It makes them available to US law enforcement agencies and other nations ’ financial intelligence operations .
It even compiles a report called “ Kleptocracy Weekly ” that summarizes the dealings of foreign leaders such as Russian President Vladimir Putin .
What it does not do is force the banks to shut the money laundering down .
In the rare instances when the US government does crack down on banks , it often relies on sweetheart deals called deferred prosecution agreements , which include fines but no high-level arrests .
The @ @ @ @ @ @ @ to hold executives personally accountable , under guidance by former deputy attorney general Rod Rosenstein that warned government agencies against “ piling on.
” Rosenstein did not respond to requests for comment , but after this article was published , he wrote to say that his policies sought to “ encourage prosecutors to pursue charges against the people responsible for corporate wrongdoing.
” The FinCEN Files investigation shows that even after they were prosecuted or fined for financial misconduct , banks such as JPMorgan Chase , HSBC , Standard Chartered , Deutsche Bank @ @ @ @ @ @ @ continued to move money for suspected criminals .
Suspicious payments flow around the world and into countless industries , from international sports to Hollywood entertainment to luxury real estate to Nobu sushi restaurants .
They filter into the companies that make familiar items from people ’ s lives , from the gas in their car to the granola in their cereal bowl .
The FinCEN Files expose an underlying truth of the modern era : The networks through which dirty money traverse the world have become vital arteries of the global economy .
@ @ @ @ @ @ @ wide-ranging and so unchecked that it has become inextricable from the so-called legitimate economy .
Banks with household names have helped to make it so .
Information from millions of these documents feeds into a single database , through which law enforcement officers can summon detailed financial information with a few keystrokes .
The FinCEN Files opens a rare window into this vast system of financial intelligence , unmatched in the world but all but unknown to the public .
The SARs themselves are so closely held that members of the public can @ @ @ @ @ @ @ subpoenas , and banks are not allowed even to confirm their existence .
Prior to this reporting , very few SARs had ever been revealed .
The FinCEN Files encompass more than 2,100 .
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 .
( Here ’ s an explanation of how we did it . )
In all , suspicious activity reports in the FinCEN Files flagged more than @ @ @ @ @ @ @ and 2017 .
Western banks could have blocked almost any of them , but in most cases they kept the money moving and kept collecting their fees .
Suspicious activity reports are written by the banks ’ financial crime watchdogs , or compliance officers , who are often parked in remote offices and left to make sense of a vast number of transactions with very few resources , writing SARs with little research or verification .
BuzzFeed News ’ research went much further , including reams of internal bank data , thousands of @ @ @ @ @ @ @ interviews with sources across the globe , dozens of Freedom of Information Act filings , five public records lawsuits , and requests for three federal courts to unseal records — all to piece together the intricacies of a financial system that is largely hidden .
BuzzFeed News is not publishing the SARs in full because they contain information about people or companies that are not under suspicion , but who were swept up in the banks ’ searches .
A subset of the documents is being published , with redactions , to support @ @ @ @ @ @ @ Treasury Department received detailed questions about the FinCEN Files investigation , the agency released a statement saying that it was “ aware that various media outlets intend to publish a series of articles based on unlawfully disclosed Suspicious Activity Reports ( SARs ) .
” It continued , “ the unauthorized disclosure of SARs is a crime that can impact the national security of the United States , compromise law enforcement investigations , and threaten the safety and security of the institutions and individuals who file such reports.
” The agency announced that @ @ @ @ @ @ @ Department of Justice and the Treasury Department ’ s Office of Inspector General .
In a subsequent letter , FinCEN ’ s general counsel said that disclosure of SARs can make banks less willing to file them , which “ could mean law enforcement has fewer potential leads to stop crimes like human trafficking , child exploitation , fraud , corruption , terrorism , and cyber-enabled crime.
” FinCEN did not respond to repeated invitations to discuss security concerns .
Sen. Ron Wyden , a member of the Senate Intelligence Committee , which @ @ @ @ @ @ @ the FinCEN Files investigation “ reinforces the fact that we now have two systems of law enforcement and justice in the country.
” Drug cartels move millions through US banks ; poor people go to jail for possession .
“ If you 're wealthy and well-connected , you can figure out how to do an enormous amount of harm to society at large and ensure that it accrues to enormous financial benefit for all of you.
” Robert Mazur , a former federal special agent and an expert in money laundering , said @ @ @ @ @ @ @ enhance national security , aid future investigations , and encourage institutions to more consistently adhere to SAR filing requirements , ” and `` will hopefully get people who are in a position of power to correct an apparent systemic failure.
” Based in the United Arab Emirates , Mazaka General Trading presented itself to the world as a wholesaler .
But between March 2013 and April 2014 , the company received nearly $ 50 million from five companies involved in a Russian money laundering ring that manipulated international stock trades .
In May @ @ @ @ @ @ @ than $ 4 million from a Singapore company that appears barely even to exist .
It was also sending and receiving money from British firms located at 175 Darkes Lane , one of the world 's most notorious addresses for shell companies , which are a common tool to hide ownership .
These transactions by Mazaka General Trading — which the Treasury Department later declared to be a part of the Khanani money laundering network , a group that has financed terrorism and drug cartels around the globe — involved businesses and people @ @ @ @ @ @ @ States .
But as the money pinged around from one bank to another , it was all being tracked and it would all be reported to the Treasury Department .
Because the US dollar is the lifeblood of international finance , the common denominator between the world ’ s disparate currencies , banking customers around the world need access to it .
But only select banks are licensed to conduct dollar transactions .
So smaller banks in other countries partner with larger institutions , which exchange their customers ’ pesos , yuan , @ @ @ @ @ @ @ fee , the arrangement , known as correspondent banking , helps keep the global economy humming .
As they pass through US banks , these transfers give the Treasury Department a vantage that no other country has .
It shares some of that information through the Egmont Group , a little-known coalition of financial intelligence units from more than 150 countries and territories .
SARs have provided Egmont members with financial details that would be otherwise unattainable , such as those concerning former Olympic Committee member Lamine Diack , who has been sentenced @ @ @ @ @ @ @ Russian doping scandal , and the Russian oligarch Oleg Deripaska , who was sanctioned by the US two years ago .
( Deripaska has sued the US government , maintaining that he is an innocent victim of politics . )
But if the database is a powerful asset to law enforcement investigations , to privacy advocates , it is a nightmare of overreach .
Congress created the current SAR program in 1992 making banks the frontline in the fight against money laundering .
But Michael German , a former FBI special agent who @ @ @ @ @ @ @ , said that after 9/11 , `` the SAR program became more about mass surveillance than identifying discrete transactions to disrupt money launderers.
” Today , he said , `` the data is used like the data from other mass surveillance programs .
Find someone you want to get for whatever reason then sift through the vast troves of data collected to find anything you can hang them with . ''
In 2017 , when US congressional committees began investigating the last presidential election and other matters , they , too , turned @ @ @ @ @ @ @ requested SARs on Deutsche Bank , which had loaned Trump money ; Christopher Steele , the former MI6 agent who wrote the so-called Trump dossier ; an array of Russian oligarchs ; Trump ’ s former campaign chairperson Paul Manafort ; and even a small casino in the Pacific run by a former Trump employee .
All told , they were looking for information on more than 200 entities .
FinCEN unearthed tens of thousands of pages of documents .
Those documents , along with a few additional SARs requested by federal law @ @ @ @ @ @ @ of the FinCEN Files .
Some were never turned over to the committees that requested them .
A person familiar with the matter blew the whistle to multiple members of Congress .
The collection does not include any SARs about Trump ’ s finances .
( A source familiar with the matter told BuzzFeed News that FinCEN ’ s database did not contain SARs on either Trump or the Trump Organization . )
And though the documents show suspicious payments to people in Trump ’ s orbit before and after key moments in @ @ @ @ @ @ @ not provide direct information on any election interference .
Because the searches were so broad , however , they revealed something that most in Congress hadn ’ t even been looking for : evidence that the world ’ s biggest banks kept doing business with clients that they themselves suspected were facilitating terror and corruption .
The information was laid out in transaction by transaction .
And it had been there all along .
FinCEN received more than 2 million SARs last year .
That number has nearly doubled over the past decade @ @ @ @ @ @ @ pressure to file and the volume of international transactions has grown .
Over the same period , FinCEN ’ s staff has shrunk by more than 10 % .
Sources there say most SARs are never even read , let alone acted upon .
Meanwhile , 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 @ @ @ @ @ @ @ welcome their business .
By December 2013 , JPMorgan Chase had filed at least eight SARs on accounts and companies controlled by 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 .
Paul Pelletier , a former senior Justice Department lawyer who once led the agency ’ s fraud unit , said that approach makes a mockery of the system .
“ You ca @ @ @ @ @ @ @ SAR without eventually violating the money laundering laws , ” he said .
“ You cut them off and drop them as clients .
But you do n't keep taking their money . ''
Despite the banks ’ sweeping powers to investigate account holders , the FinCEN Files investigation reveals that major financial institutions often fail to perform the most basic checks on their customers , such as verifying where a business is located when someone opens a new account .
The lapses allow criminal groups to hide behind shell corporations , registered @ @ @ @ @ @ @ , and slide the proceeds of their crimes into the global financial system .
In many cases , the banks appear to have no idea whatsoever whose money they are moving .
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 @ @ @ @ @ @ @ , a sprawling scheme in which wealthy Russians , facilitated by banks , secretly moved their money into the West .
After scandals like the Russian Laundromat , federal prosecutors have made big pronouncements about forcing meaningful change .
Addressing an anti–money laundering conference in 2015 , Leslie Caldwell , then the head of the Justice Department 's criminal division , said that when it came to getting banks to clean up their acts , deferred prosecution agreements , which typically involve a fine and a probationary period , “ can often accomplish @ @ @ @ @ @ @ more than , we could from a criminal conviction.
” But the FinCEN Files investigation shows something very different .
Banks often get to the end of their agreement without actually fixing the problems .
Then , instead of getting the prosecution that they had been threatened with , they just get another chance .
And sometimes another .
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 @ @ @ @ @ @ @ , 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 .
JPMorgan Chase got a deferred prosecution deal of its own .
For years , it was the primary bank of the world ’ s biggest @ @ @ @ @ @ @ multiple warnings from its own employees , the bank never filed a suspicious activity report on him and allegedly collected $ 500 million in fees .
For punishment , the bank was required to pay a $ 1.7 billion fine and promise to improve its money laundering defenses .
But after it settled the Madoff case , the bank ’ s own investigators said they suspected it had opened its accounts to an alleged Russian organized crime figure who is known for drug trafficking and contract murders , as well as businesses tied @ @ @ @ @ @ @ which the US has placed off-limits .
It happened at Standard Chartered , too .
Last year , the government amended its 2012 deferred prosecution agreement after the bank was found to have continued clearing transactions for individuals and businesses in off-limits countries , primarily Iran .
The bank paid fines totaling $ 1.1 billion to US and UK authorities , and extended the terms of the deferred prosecution agreement for the sixth time in the space of seven years .
The bank apologized for its “ violations and control deficiencies ” but @ @ @ @ @ @ @ .
The FinCEN Files documents show Standard Chartered processed hundreds of millions of dollars for companies it suspected were circumventing sanctions against Iran until at least 2017 .
Since 2010 , at least 18 financial institutions have received deferred prosecution agreements for anti–money laundering or sanctions violations , according to an analysis by BuzzFeed News .
Of those , at least four went on to break the law again and get fined .
Twice , the government responded to this kind of repeat offense by renewing the deferred prosecution agreement — the very @ @ @ @ @ @ @ If the government wanted to , experts in financial crime say , it could stop the dirty money coursing through the big banks , as well as the vast array of criminal activity it funds .
One step would be to require companies to disclose their owners to the Treasury Department , rather than allowing people to hide behind a shell company .
Lawmakers are debating a bipartisan bill that could address that for small companies .
The National Federation of Independent Business has opposed it , saying it raises privacy issues and @ @ @ @ @ @ @ , who cosponsored the bill , told BuzzFeed News , “ Congress must act soon because criminals have long been revising , adjusting , and amending their tactics to circumvent our laws.
” Greater public accountability could also make a difference .
HSBC has fought to keep secret the final report by the monitor that the government installed to watch over the bank during the years of its deferred prosecution agreement .
It even took the unusual step of weighing in on a Freedom of Information Act lawsuit , when BuzzFeed News sued @ @ @ @ @ @ @ .
The knowledge that negative reports could become public , and potentially damage share prices , could impel wayward banks to clean up their acts .
Others say the SARs themselves are part of the problem .
German , the former FBI special agent , called the idea behind them `` naive '' because `` the largest money laundering operations occur with the cooperation of the financial institutions , or at least some officers within those institutions .
The lack of money laundering enforcement had nothing to do with a lack of evidence @ @ @ @ @ @ @ of interest by political and law enforcement leadership.
’ ’ The most powerful way to fix the problem might be the simplest : Arrest the executives whose banks break the law .
`` The bankers will never learn until you start putting silver bracelets on people , '' Pelletier said .
`` Think of the message you 're sending to repeat offenders . ''
`` These guys know what they 're doing , ’ ’ said Thomas Nollner , a former regulator with the Office of the Comptroller of the Currency .
“ @ @ @ @ @ @ @ go to jail , period . ''
That approach was once the norm .
“ Back in the 1980s and 90s and even into the early 2000s , the government went after CEOs all the time , ” said US District Judge Jed Rakoff , who has been an outspoken critic of weak penalties for white-collar criminals .
In the past , the CEOs of Enron , WorldCom , and Tyco were all sent to jail for what they did , he pointed out .
“ Now that ’ s deterrence.
” Rakoff @ @ @ @ @ @ @ , a bank that engages in money laundering can literally be forced out of business by the government , and it is kind of surprising that government hasn ’ t taken that step , given the obvious deterrent effect it would have.
” Ultimately , the power to keep criminal profits from being laundered through the US financial system may not reside in the actions of a bank ’ s compliance office or its computer systems or even its executive tier .
It may not reside with banking regulators or federal prosecutors or @ @ @ @ @ @ @ a matter of national policy alone .
Shutting down wayward banks could have an impact on the whole economy — for the US , its major trade partners , and beyond .
When other countries find their banks under US scrutiny , they step in .
In 2012 , Standard Chartered and HSBC were facing criminal prosecution .
George Osborne , at that time the UK ’ s chancellor of the exchequer , wrote to the chairperson of the US Federal Reserve , Ben Bernanke , and Treasury Secretary Timothy Geithner to discuss @ @ @ @ @ @ @ response could have “ unintended consequences.
” He warned of a “ contagion.
” The implication : Close one bank and the whole economy could suffer .
Mazur , the former federal special agent and money laundering expert , says there are a “ mosaic ” of reasons why US authorities let the money keep running , but one of them may just be that it finds its way into too many pockets .
“ Even if it 's bad wealth , it buys buildings , ” he said .
“ It puts @ @ @ @ @ @ @ the nation.
” ● Sophie Comeau , Waylon Cunningham , Sam Feehan , Nancy Guan , Kristy Hutchings , Kylie Storm , Felicia Tapia , Karen Wang , Abby Washer , and Ashley Zhang of the USC Annenberg School for Communication and Journalism contributed reporting .

Paul Pelletier, a former senior Justice Department lawyer who once led the agency’s fraud unit, said that approach makes a mockery of the system. “You can't just file SAR after SAR after SAR without eventually violating the money laundering laws,” he said. “You cut them off and drop them as clients. But you don't keep taking their money."
Despite the banks’ sweeping powers to investigate account holders, the FinCEN Files investigation reveals that major financial institutions often fail to perform the most basic checks on their customers, such as verifying where a business is located when someone opens a new account. The lapses allow criminal groups to hide behind shell corporations, registered with no identifying details about their ownership, and slide the proceeds of their crimes into the global financial system.
In many cases, the banks appear to have no idea whatsoever whose money they are moving.
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.
After scandals like the Russian Laundromat, federal prosecutors have made big pronouncements about forcing meaningful change.
Addressing an anti–money laundering conference in 2015, Leslie Caldwell, then the head of the Justice Department's criminal division, said that when it came to getting banks to clean up their acts, deferred prosecution agreements, which typically involve a fine and a probationary period, “can often accomplish as much as, and sometimes even more than, we could from a criminal conviction.”
But the FinCEN Files investigation shows something very different. Banks often get to the end of their agreement without actually fixing the problems. Then, instead of getting the prosecution that they had been threatened with, they just get another chance. And sometimes another.
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.
JPMorgan Chase got a deferred prosecution deal of its own. For years, it was the primary bank of the world’s biggest Ponzi schemer, Bernie Madoff. Despite multiple warnings from its own employees, the bank never filed a suspicious activity report on him and allegedly collected $500 million in fees. For punishment, the bank was required to pay a $1.7 billion fine and promise to improve its money laundering defenses. But after it settled the Madoff case, the bank’s own investigators said they suspected it had opened its accounts to an alleged Russian organized crime figure who is known for drug trafficking and contract murders, as well as businesses tied to the repressive North Korean regime, which the US has placed off-limits.
It happened at Standard Chartered, too. Last year, the government amended its 2012 deferred prosecution agreement after the bank was found to have continued clearing transactions for individuals and businesses in off-limits countries, primarily Iran. The bank paid fines totaling $1.1 billion to US and UK authorities, and extended the terms of the deferred prosecution agreement for the sixth time in the space of seven years. The bank apologized for its “violations and control deficiencies” but promised that none had occurred after 2014.
The FinCEN Files documents show Standard Chartered processed hundreds of millions of dollars for companies it suspected were circumventing sanctions against Iran until at least 2017.
Since 2010, at least 18 financial institutions have received deferred prosecution agreements for anti–money laundering or sanctions violations, according to an analysis by BuzzFeed News. Of those, at least four went on to break the law again and get fined. Twice, the government responded to this kind of repeat offense by renewing the deferred prosecution agreement — the very tool that failed the first time.


buzzfeed--2020-09-24--We Got Our Hands On Thousands Of Secret Documents. Let’s Break Them Down.

Twenty-two thousand pages of never-before-released government documents .
Hundreds of thousands of transactions .
More than $ 2 trillion .
A close accounting of BuzzFeed News ’ unprecedented trove .
More than a year ago , BuzzFeed News received a remarkable collection of secret government documents .
This huge trove had been assembled at the request of law enforcement agencies and congressional committees investigating the 2016 presidential election and other matters .
The documents contained private banking information about public figures and senior government officials around the world — along with suspected criminals and organizations tied to terrorism .
Among @ @ @ @ @ @ @ activity reports , or SARs , which banks and other financial institutions submit to the US Treasury Department ’ s Financial Crimes Enforcement Network , or FinCEN , when they observe transactions that suggest money laundering or other illegal activity .
Such reports can support investigations and intelligence gathering — but by themselves they are not evidence of a crime .
These documents are so closely protected that they are never supposed to be available to the public .
You can ’ t get them through Freedom of Information requests and you can @ @ @ @ @ @ @ .
Banks are not supposed to admit the existence of a SAR — even to other banks .
Prior to this reporting , very few SARs are known ever to have been revealed .
BuzzFeed News has thousands .
Mostly dating from 2011 to 2017 , although describing some transactions that occurred as early as 1999 , the documents provide an unprecedented glimpse into global money laundering .
To analyze them and crunch the numbers , BuzzFeed News teamed up with the International Consortium of Investigative Journalists and more than 100 partner news @ @ @ @ @ @ @ was a yearlong data analysis collaboration that required thousands of hours of manual data entry , the creation of custom-built digital tools , machine learning , and specialized validation software .
But it all came down to those suspicious activity reports .
The Anatomy of a SAR — and How We Dissected Them All SARs have two parts : a set of data tables and a narrative .
Some narratives are bare bones , while others are in-depth accounts including individual transactions , additional parties , and what the money was purportedly being @ @ @ @ @ @ @ , these narrative elements alone came to more than 8,000 pages — or about 3 million words .
We tried writing computer programs to automatically extract this crucial information , but we quickly discovered that it was not possible .
So with no other choice , we did it the old-fashioned way : We read every last page .
With the help of ICIJ ’ s document-collaboration platform , BuzzFeed News and the partner newsrooms divided the task among more than 80 reporters .
For each document , the reporters captured every set @ @ @ @ @ @ @ ICIJ submitted each “ extraction ” to multiple rounds of validation .
It was a massive effort , but it allowed us to map out more than 200,000 of the transactions in the SARs .
This effort gave reporters access to a greater level of structured , searchable detail than FinCEN itself provides to investigators .
In addition to the written SARs , BuzzFeed News received hundreds of spreadsheets that banks had sent to FinCEN .
Although those files often lack the context of the written reports , they list more than 100,000 @ @ @ @ @ @ @ slightly different way of producing these files .
So ICIJ undertook an effort to standardize the field names and address formats to make them more useful to our partners .
More Than $ 2 Trillion — Yes , With a “ T ” In total , these reports flagged more than $ 2 trillion in transactions .
Here ’ s how it broke down .
The Banks : The FinCEN Files contain reports submitted by nearly 90 banks and other financial institutions .
This particular collection of documents is not a representative sample @ @ @ @ @ @ @ this subset , by far the greatest number of SARs come from Deutsche Bank .
Here are the top 10 banks represented in the FinCEN Files , plus the total value of suspicious transactions they flagged : One report , filed in August 2014 by JPMorgan Chase , identifies more than $ 335 billion in suspicious activity , relating to more than 100,000 wire transfers “ sent , received or processed ” over the course of a decade-plus by MKS , a Switzerland-based company that trades precious metals .
“ We can not @ @ @ @ @ @ @ from a half decade ago of which we have no knowledge , ” a spokesperson for MKS told BuzzFeed News and ICIJ .
“ We note , however , that referencing $ 335 billion in purported wire transactions over a twelve-year period creates a false and misleading impression about the scale and scope of our precious metal operations.
” MKS is “ proud of our record of maintaining an industry-leading compliance program , ” the spokesperson said , “ and our long history of maintaining uninterrupted access to financial markets around the world.
@ @ @ @ @ @ @ at least $ 1 billion to the Treasury ; these big-dollar reports account for more than 90 % of all “ suspicious activity ” in these documents .
When banks first encounter suspicious transactions , they are supposed to file a report within 30 days .
But that doesn ’ t mean all of the information is timely : SARs often refer to much older transactions , even some that occurred more than a decade before .
This frequently happens when banks receive new information about old transactions or clients , such as @ @ @ @ @ @ @ but other times , the reason is unclear .
The Objects of Suspicion : The documents provide information on more than 10,000 people and organizations spanning more than 170 countries and territories .
They also touch almost every state in the US .
At least 25 of the people named as subjects have appeared on Forbes ' list of billionaires in 2018 , 2019 , or 2020 , according to an analysis by ICIJ and BuzzFeed News .
The SARs , however , are far more likely to mention organizations than people .
@ @ @ @ @ @ @ a where ’ s where of wealth accumulation and management .
More than 400 feature companies with addresses in the British Virgin Islands , and more than 300 include Hong Kong — two popular places for stashing wealth with little scrutiny .
More than a fifth of the SARs in the FinCEN Files include a subject whose “ address ” is effectively blank : no street number , city , state , or even country .
In some cases , the blank addresses are for customers in the bank ’ s own corporate @ @ @ @ @ @ @ numerous times in the FinCEN Files .
Mayzus Financial Services , an online payment processing company that served clients involved in a bitcoin money laundering ring , sets the record , appearing as a subject of 36 SARs .
Second is Kaloti Jewellery International , a Dubai-based precious metals company that was flagged as a subject in 34 separate SARs by eight different banks .
Here are the five subjects flagged most often : Responding to a request for comment , a representative for Mayzus Financial Services said the company takes compliance seriously @ @ @ @ @ @ @ offline fraudsters , corrupt remittance agents , money launderers , and apprehend hundreds of millions of dollars worth of illicitly gained assets '' and that `` from my perspective MFS has done exactly what it was supposed to be doing . ''
A lawyer for Kaloti said that the number of SARs was `` statistically insignificant '' in the context of its industry .
`` Kaloti vehemently denies any allegations of misconduct , whether those allegations stem from today or a decade ago , '' the company told ICIJ and BuzzFeed News .
@ @ @ @ @ @ @ and Bufalo Management did not respond to BuzzFeed News ’ inquiries .
What the Government Doesn ’ t Know Last year , banks and other financial institutions filed more than 2 million SARs .
Government investigators who combat money laundering told BuzzFeed News that the sheer volume of SARs made it impossible to pay close attention to them all .
`` I do n't think that we have enough resources in the government to meaningfully go through them all , '' said Richard Elias , a former federal prosecutor for the Eastern District @ @ @ @ @ @ @ SARs filed grows every year , FinCEN ’ s staff has shrunk by more than 10 % over the past decade , according to official Treasury reports .
( In addition to full-time staff , FinCEN also employs contractors to analyze SARs . )
In 2017 , FinCEN ’ s acting director testified before Congress that the agency faced hiring issues , in part because of how long it takes to get security clearances .
FinCEN did not respond to BuzzFeed News ’ requests for comment about its investigative findings .
It did @ @ @ @ @ @ @ that “ the unauthorized disclosure of SARs is a crime , ” and it announced that it was referring the matter to the Department of Justice and the Treasury Department ’ s Office of Inspector General .
FinCEN makes its database of SARs available to more than 450 law enforcement and regulatory agencies around the country , with more than 13,000 users who query the system millions of times a year .
FinCEN does not require banks to file spreadsheets detailing each individual transaction , although some do so voluntarily .
Yet it @ @ @ @ @ @ @ say are most important .
“ There 's nothing of greater value than being able to take a look at a series of wire transfers or a series of deposits or a series of withdrawals , ” said Peter Djinis , a former FinCEN analyst who helped to set up the original SAR system .
“ All of that information is so useful.
” When banks don ’ t attach transaction files , analysts have to comb through each report individually or request those records directly .
The database produced by BuzzFeed News @ @ @ @ @ @ @ the individual filings themselves , and has already helped our international network of reporters examine failures by governments and banks to stem the flow of dirty money across the globe .
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More than a year ago, BuzzFeed News received a remarkable collection of secret government documents. This huge trove had been assembled at the request of law enforcement agencies and congressional committees investigating the 2016 presidential election and other matters. The documents contained private banking information about public figures and senior government officials around the world — along with suspected criminals and organizations tied to terrorism.
Among the documents were more than 2,100 suspicious activity reports, or SARs, which banks and other financial institutions submit to the US Treasury Department’s Financial Crimes Enforcement Network, or FinCEN, when they observe transactions that suggest money laundering or other illegal activity. Such reports can support investigations and intelligence gathering — but by themselves they are not evidence of a crime.
These documents are so closely protected that they are never supposed to be available to the public. You can’t get them through Freedom of Information requests and you can’t subpoena them in legal proceedings. Banks are not supposed to admit the existence of a SAR — even to other banks. Prior to this reporting, very few SARs are known ever to have been revealed. BuzzFeed News has thousands.