The 11 most important things in the leaked FinCEN files, which exposed $2 trillion in suspicious transactions and are roiling the world of finance

A Deutsche Bank branch in Frankfurt, Germany.

  • Leaked documents from the Financial Crimes Enforcement Network (FinCEN) were shared with news outlets.

  • They show big banks have for years engaged with dirty money with little oversight.

  • Banks named include JPMorgan Chase, HSBC, Barclays, and Deutsche Bank.

  • Here are some of the biggest takeaways from the scandal.

  • Visit Business Insider’s homepage for more stories.

Thousands of leaked documents shared with journalists have shown how some of the world’s biggest banks for years facilitated the movement of dirty money.

The documents, part of a collection of files belonging to the Financial Crimes Enforcement Network, were published on Sunday by BuzzFeed News and the International Consortium of Investigative Journalists.

FinCEN is in charge of compiling “suspicious activity reports” sent to it by banks that suspect financial wrongdoing by their clients. SARs do not constitute evidence of wrongdoing, but they are a way to alert regulators and law enforcement.

The documents are shared with law-enforcement and financial-intelligence groups around the world. The agency does not require banks to stop dealing with clients who prompted SARs.

The BuzzFeed News and ICIJ report said banks including JPMorgan Chase, HSBC, and Deutsche Bank engaged with and facilitated the movement of criminal money even after raising suspicions.

The files detail movements and transactions over almost two decades, starting in 2000 and continuing into 2017.

Many of the banks named in the report have responded in statements to BuzzFeed News.

Here are some of the biggest revelations to come out of the bombshell report:

5 banks processed more suspicious money than anyone else in the leak

The names of five big banks came up more than any others in the documents.

Of the $2 trillion in suspicious transactions, $1.2 trillion moved through Deutsche Bank.

Nearly all the rest was processed by JPMorgan, Standard Chartered, Bank of New York Mellon, and Barclays.

Several other banks, including Société Générale, HSBC, State Street Corporation, Commerzbank AG, and China Investment Corporation, also processed billions.

European bank shares — already under pressure from a resurgence of the coronavirus — have tumbled since the report was published.

Barclays shares were last down 5.4{09c3c849cf64d23af04bfef51e68a1f749678453f0f72e4bb3c75fcb14e04d49} on London’s FTSE 100 index, at their lowest since late April, while Deutsche Bank shares were down nearly 9{09c3c849cf64d23af04bfef51e68a1f749678453f0f72e4bb3c75fcb14e04d49} in Frankfurt, at their weakest since late May.

The leaks were 0.02{09c3c849cf64d23af04bfef51e68a1f749678453f0f72e4bb3c75fcb14e04d49} of total SARs

Reporters saw more than 2,100 leaked SARs — but this is just the tip of the iceberg.

According to the ICIJ, more than 12 million SARs were filed with FinCEN from 2011 to 2017, meaning those in the leak are 0.02{09c3c849cf64d23af04bfef51e68a1f749678453f0f72e4bb3c75fcb14e04d49} of the total.

HSBC moved money for the WCM777 Ponzi scheme that victimized thousands

The files show that HSBC allowed fraudsters involved with WCM777, an $80 million Ponzi scheme, to move money around the world, the BBC reported.

In 2013 and 2014, the bank moved fraudsters’ money from the US to Hong Kong, despite having promised to clamp down on money laundering, the outlet reported.

In 2012, after a US Senate investigation, the bank was fined a record $1.9 billion for its role in channeling cash for what the investigators called “drug kingpins and rogue nations,” the BBC reported at the time.

But the following year, fraudsters working with WCM777 were able to move more than $15 million through HSBC, despite warnings that it was a scam, the leaked documents show.

At the time of the notice, WCM777 was barred from conducting business in three states.

The Ponzi scheme targeted poor communities in various nations and victimized thousands of Asian and Latino immigrants, according to the BBC and BuzzFeed News.

HSBC told the BBC it has always followed its legal duty in reporting such activities.

Read the full report from the BBC here.

Banks processed millions for the family of a Kazakh politician wanted by Interpol

JPMorgan Chase, along with Bank of America, Citibank, American Express, and others processed huge transactions linked to a Kazakh politician wanted by Interpol, BuzzFeed News reported.

The family of Viktor Khrapunov, a former mayor of Almaty, the largest city in Kazakhstan, used JPMorgan Chase to handle millions of dollars in transactions, even after Interpol issued a red notice, the outlet said.

At the time of the transactions, Khrapunov and his wife stood accused of money laundering, fraud, and the creation of an organized crime group, according to Newsweek.

They were convicted in absentia, having fled to Switzerland. They described the charges as politically motivated, BuzzFeed News reported.

Arkady Rotenberg, a Putin associate, may have used Barclays to launder money and evade sanctions

The documents suggest that a close associate of Russian President Vladimir Putin’s may have used the UK-based Barclays Bank to avoid sanctions and launder money, the BBC reported.

Arkady Rotenberg, a childhood friend of Putin’s, is among several associates who were put under European Union and US sanctions following Russia’s annexation of Crimea in 2014, the BBC reported. The sanctions were meant to restrict Rotenberg from conducting business with Western banks.

But companies controlled by Rotenberg appeared in numerous SARs in the leak, according to the BBC.

From 2012 to 2016, a company named Advantage Alliance moved about $77 million through HSBC; the US Senate has said there is strong evidence that the company is owned by Rotenberg. A Senate investigation found that the company was making secretive art purchases using its Barclays account to evade the sanctions, the BBC reported.

Barclays closed Advantage Alliance’s account in 2016, but leaked SARs showed that the bank continued to deal with numerous other companies thought to be owned by Rotenberg until 2017, the BBC reported.

Barclays denied any wrongdoing.

Read the full report from the BBC here.

$142 million of suspected Iranian money was processed via the UAE

US prosecutors have alleged that Gunes General Trading, based in Dubai, was used to funnel Iranian state money via the United Arab Emirates and evade international sanctions, according to the BBC.

In 2011 and 2012, the UAE’s central banking system processed $142 million in transactions for the company, despite them being labeled as suspicious, the BBC said.

A New York branch of Standard Chartered Bank noted hundreds of suspicious transactions from the company and flagged them to the UAE’s central bank but did not mention an Iran connection, the BBC reported.

While the UAE’s central bank said it alerted law enforcement and closed the accounts, Gunes General Trading used other state-owned banks to funnel another $108 million in transactions until September 2012, the BBC reported.

In 2016, the US said the company was involved in a major sanctions-evasion scheme. It has wound up within the past two years, the BBC reported.

The Central Bank of the UAE did not respond to the BBC’s request for comment.

Read the full report here.

A major donor of UK’s ruling Conservative Party was linked to the Kremlin

The husband of a major donor to UK Prime Minister Boris Johnson’s Conservative Party has received money from a Putin-linked millionaire who is under US sanctions, the leaked documents show.

The files showed that Vladimir Chernukhin, the husband of Lubov Chernukhin — who has given almost $2.2 million to the Conservative Party — was given $7.8 million by an offshore company that could be traced back to a Russian politician and oligarch named Suleyman Kerimov.

Kerimov was one of several oligarchs named in a 2018 report by the US Treasury Department discussing “malign” Russian activity. The Treasury report said he was accused of laundering money and leaving taxes unpaid in Europe.

Lubov Chernukhin has spent time in the company of three prime ministers — and she once paid $205,000 to play tennis with Johnson, according to the BBC.

North Korea laundered money using a string of shell companies and US banks

The leaked documents suggest that despite international sanctions blocking North Korea’s access to the global financial system, it has laundered more than $174.8 million, NBC News reported.

The documents show that transactions flagged as suspicious from about 2008 to 2017 were cleared through US banks including JPMorgan Chase and Bank of New York Mellon, NBC News said.

North Korean wire transfers flagged in the SARs were often facilitated by Chinese and shell companies, NBC News reported.

Experts told NBC News that the transactions showed all the hallmarks of money laundering.

Read the full report here.

Banks first flagged Paul Manafort’s as suspicious years before he was arrested

Bank transactions linked to President Donald Trump’s former strategist, who was convicted of fraud in 2018, were flagged as suspicious six years earlier 2012, the ICIJ reported. 

More than $50 million in payments to Manafort processed by JP Morgan Chase attracted SARs, according to the ICIJ. 

$6.9 million was processed by the bank after Manafort resigned from Trump’s campaign, the ICIJ reported. 

Manafort is serving a seven-year term for tax fraud, bank fraud, and failure to report foreign bank accounts.

Deutsche Bank managers knew more than they claimed about an infamous trading scandal

2017’s mirror trading scandal — a $10 billion money laundering scheme used by crime bosses, drug cartels and terror networks — saw Deutsche Bank pay a fine and blame middle managers in its Moscow offices.

But the leaked SARs show that awareness of the issues at the heart of the scandal went far higher in the company, BuzzFeed reported.

According to BuzzFeed, warnings of serious failings at the company were sent to the bank’s chair and its supervisory board.

Bank of America was so concerned that it flagged SARs about Deutsche Bank’s dealings, the files show. BofA managers were asked to leave the building when they attempted to discuss the matter in London, BuzzFeed reported.

Christian Sewing, who is today Deutsche Bank’s CEO, ran the audit office overseeing the bank’s Moscow dealings — but gave the office the all-clear, BuzzFeed reported.

Deutsche Bank told BuzzFeed that Sewing had not been personally involved in the Moscow audit.

Read the full story here

Financial regulators still only catch about 1{09c3c849cf64d23af04bfef51e68a1f749678453f0f72e4bb3c75fcb14e04d49} of the activity behind dirty money

The FinCEN leak is a massive 2,100 documents, but they’re still a fraction of what;s out there.

Banks often don’t know, or don’t follow up on their enquiries about, the ultimate owners of accounts they are processing, the ICIJ reported

David Lewis, executive secretary of anti-money laundering group Financial Action Task Force, told the ICIJ that compliance was more often about going through the motions, rather than taking real action, saying: “Everybody is doing really badly.”

A 2011 report by the United Nations Office on Drugs and Crime estimated that “less than 1{09c3c849cf64d23af04bfef51e68a1f749678453f0f72e4bb3c75fcb14e04d49} of global illicit financial flows are currently seized and frozen.”

Read the full story here.

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