The 7 most important things in the leaked FinCEN files, which exposed $2 trillion in suspicious transactions and are roiling the world of finance

JP Morgan Chase & Co sign outside headquarters in New York

  • Thousands of leaked documents from the Financial Crimes Enforcement Network were shared with hundreds of journalists, revealing how big banks have for years engaged with dirty money. 

  • The agency, which operates under the Treasury Department, compiles “suspicious activity reports” when it detects potential or evident financial crimes.

  • Banks such as JPMorgan Chase, HSBC, and Deutsche Bank facilitated the movement of criminal money even after getting caught, the agency reported.

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

  • Visit Business Insider’s homepage for more stories.

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

The documents are part of a collection of files that belongs to the Financial Crimes Enforcement Network (FinCEN), and were first published by BuzzFeed News and the International Consortium of Investigative Journalists (ICIJ).

The agency is in charge of compiling “suspicious activity reports” (SARs) sent to it by banks which suspect financial wrongdoing by their clients.

The documents are distributed and 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 report said banks such as JPMorgan Chase, HSBC, and Deutsche Bank, among others, engaged with and facilitated the movement of criminal money even after raising their suspicions. 

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

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

Five 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 revealed to reporters. Of the $2 trillion in suspicious transactions, $1.2 trillion of that moved through Deutsche Bank. 

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

A litany of other banks, including Société Générale, HSBC, State Street Corporation, Commerzbank AG, and China Investment Corporation also processed billions between them. 

European bank shares — already under pressure from a resurgence of the coronavirus — have tumbled since the news. Deutsche Bank shares were down 5{09c3c849cf64d23af04bfef51e68a1f749678453f0f72e4bb3c75fcb14e04d49} as of 3:38 am ET, while Barclays lost more than 6{09c3c849cf64d23af04bfef51e68a1f749678453f0f72e4bb3c75fcb14e04d49}. 

Many of the banks named have responded to the reports in statements given to Buzzfeed News

The number of SARs seen by reporters are 0.02{09c3c849cf64d23af04bfef51e68a1f749678453f0f72e4bb3c75fcb14e04d49} of the total

Reporters have seen more than 2,100 SARs in the leak, but this is just the tip of the iceberg. 

According to the ICIJ, more than 12 million SARs have been filed to FinCEN between 2011 and 2017 — meaning those in the leak are 0.02{09c3c849cf64d23af04bfef51e68a1f749678453f0f72e4bb3c75fcb14e04d49} of the total. 

HSBC moved money for the WCM777 Ponzi scheme that victimized thousands 

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

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

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

Yet the following year, fraudsters working with WCM777 were nonetheless able to move more than $15 million through HSBC, despite investigations warning the bank it was a scam, the leaks now reveal. 

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

The Ponzi scheme that ran out of WCM777 victimized thousands of Asian and Latino immigrants, according to the BBC and BuzzFeed News, targeting poor communities in various nations around the world.

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

Read the full report from the BBC here.

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

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

Viktor Khrapunov is a former mayor of Almaty in Khazakhstan, the country’s largest city. The family of Viktor Khrapunov used JP Morgan Chase to handle millions of dollars in transactions, even after Interpol had issued a red notice, the outlet reported. 

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

They were later convicted in absentia, having fled to Switzerland, claiming the charges were politically motivated, BuzzFeed reported. 

Putin associate Arkaty Rotenberg may have used Barclays to launder money and evade sanctions

A close associate of Russian President Vladimir Putin may have used UK-based Barclays Bank as a way 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 both EU 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 appear in numerous SARs revealed by the leak, according to the BBC.

Between 2012 and 2016, a company named Advantage Alliance moved $77 million through HSBC. The US Senate has said there is strong evidence that the company is owned by Rotenberg. The Senate’s investigation found 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 SARs from the leak show that the bank continued to deal with numerous other companies suspected to be owned by Rotenberg until 2017, the BBC reported. 

Barclays has not admitted any wrongdoing. 

Read the full report from the BBC here.

$142 million in suspicious transactions in the UAE

The United Arab Emirates’ central bank in 2011 and 2012 processed $142 million despite the transactions being labeled as suspicious, the BBC reported.

A British bank noted the activity, flagging it out of suspicion. But Gunes General Trading, the firm responsible for pushing the transactions through the central bank, continued to use local financial institutions to process them.

Read the full report here.

Movement of money for organized crime, terrorists, and drug traffickers

Deutsche Bank facilitated the movement of money for organized crime, terrorists, and drug traffickers, according to BuzzFeed News.

Managers and top executives at Deutsche Bank knew that the bank was susceptible to criminals seeking money laundering services, according to documents reviewed by BuzzFeed News.

When reached for comment, the bank said it’s “learnt from our mistakes” and billed itself a “different bank” now.

Read the full report here.

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