PYMNTS-MonitorEdge-May-2024

Report: FinCEN Files Reveal Billions In Suspicious Money Flows

A shocking new report reveals an underworld of corruption in the world’s banks and how governments allow it to thrive, BuzzFeed News reported.

The Financial Crimes Enforcement Network (FinCEN) uncovered government documents on how giant financial institutions move trillions of dollars in suspicious transactions, padding their bottom line, while terrorists, drug dealers and corrupt politicians are allowed to run free.

FinCEN, a division of the U.S. Department of Treasury that analyzes financial transactions to combat money laundering, terrorist financing and other financial crimes across the globe, found the U.S. government appears unable to stop it.

“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,” Martin Woods, a former investigator for Wachovia, the North Carolina-based financial services company that was acquired by Wells Fargo & Co., told the news outlet.

BuzzFeed said the thousands of suspicious activity reports, authored by lenders and shared with the government, offer a glimpse into global corruption enabled by banks and allowed to flourish by regulators.

The report found the illegal profits from the drug trade, cash stolen from developing countries and Ponzi schemes flow through financial institutions despite warnings from bank employees.

The FinCEN files reveal even after some of the largest banks were fined or prosecuted for financial misconduct, Deutsche Bank, JPMorgan Chase, Standard Chartered, HSBC and Bank of New York Mellon continued to move money for suspected criminals.

Among the scams highlighted include HSBC in Hong Kong, which allowed a $15 million Ponzi scheme to move its money even after the business was being barred from operating in three states.

Standard Chartered moved cash for a Dubai business that was later accused of laundering cash on behalf of the Taliban. Between 1999 and 2017, FinCEN flagged more than $2 trillion in suspicious transactions.

Since 2010, prosecution has been delayed by 18 banks for anti-money laundering, according to BuzzFeed. Of those, at least four went on to break the law again and get fined. FinCEN received more than 2 million SARs last year.

Paul Pelletier, a former senior Justice Department lawyer, said there’s one way to stop the illegal activity.

“The bankers will never learn until you start putting silver bracelets on people,” he told BuzzFeed. “Think of the message you’re sending to repeat offenders.”

In a statement to BuzzFeed, the Treasury Department said “the unauthorized disclosure of Suspicious Activity Reports (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.”

PYMNTS-MonitorEdge-May-2024