Secret US government documents reveal that global banks have played a role in moving around staggering sums of cash for shadowy characters and criminal networks that have spread chaos and undermined democracy around the world.
The records show that five global banks — JPMorgan, HSBC, Standard Chartered Bank, Deutsche Bank and Bank of New York Mellon, kept profiting from powerful and dangerous players even after US authorities fined these financial institutions for earlier failures to stem flows of dirty money.
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 US Department of Treasury’s Financial Crimes Enforcement Network.
The agency, known in short as FinCEN, is an intelligence unit at the heart of the global system to fight money laundering.
BuzzFeed News obtained the records and shared them with the International Consortium of Investigative Journalists.
ICIJ organised a team of more than 400 journalists from 110 news organisations in 88 countries, including Times of Malta, to investigate the world of banks and money laundering.
Times of Malta will in the coming days be delving into the stories from the leak.
In all, an ICIJ analysis found, the documents identify more than $2 trillion in transactions between 1999 and 2017 that were flagged by financial institutions’ internal compliance officers as possible money laundering or other criminal activity — including $514 billion at JPMorgan and $1.3 trillion at Deutsche Bank.
Suspicious activity reports reflect the concerns of watchdogs within banks and are not necessarily evidence of any criminal conduct or wrongdoing.
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 FinCEN Files represent less than 0.02% of the more than 12 million suspicious activity reports that financial institutions filed with FinCEN between 2011 and 2017.
Authorities in the US, who play a leading role in the global battle against money laundering, have ordered big banks to reform their practices, fined them hundreds of millions and even billions of dollars, and held threats of criminal charges over them as part of so-called deferred prosecution agreements.
A 16-month investigation by ICIJ and its reporting partners shows that these headline-making tactics have not worked. Big banks continue to play a central role in moving money tied to corruption, fraud, organised crime and terrorism.
“Everyone is doing badly,” David Lewis, executive secretary of the Paris-based Financial Action Task Force, a partnership of governments around the world that sets anti-money laundering standards, acknowledged in an interview with ICIJ.
His organisation’s country-evaluation reports, which dig into how well banks and government agencies meet anti-money-laundering laws and regulations, show lots of box-checking but little practical progress. Many countries seem more concerned with looking good on paper than actually cracking down on money laundering, he said.
Even an association of the world’s biggest banks complained last year that regulators focus on “technical compliance” rather than whether systems “are really making a difference in the fight against financial crime”.