FinCEN data leak: major banks in the world are involved in terrorism and money laundering

Several of the largest banks in the world have enabled criminals to move dirty money around the planet. This is evidenced by the leaked transaction documents totaling about $ 2 trillion. Air force.

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We are talking about files from FinCEN, a special unit for combating financial crimes within the US Department of the Treasury. The documents also reveal how Russian oligarchs used Western banks to circumvent US and EU sanctions imposed on them.

This is not the first major data leak over the past five years; previously, the Panama Papers and the Paradise Papers helped show how modern money laundering and financial crime schemes work.

What are FinCEN files?

The FinCEN files consist of more than 2500 documents, most of which are reports that banks were required by law to send to the US Treasury Department from 2000 to 2017. In these reports, banks report suspicious activities of their customers, but these documents themselves do not constitute evidence of violation of the law.

The FinCEN documents were obtained by Buzzfeed journalists, who then provided them to the International Consortium of Investigative Journalists (ICIJ). The group brings together representatives from 108 news organizations in 88 countries, including reporters from the BBC's Panorama programme.

Hundreds of journalists scoured massive amounts of technical paperwork to reveal some of the activities that banks would not want to draw attention to.

What is FinCEN and SAR

FinCEN (Financial Crimes Enforcement Network), a unit for combating financial crimes within the US Department of the Treasury, collects and studies data on financial movements. FinCEN then shares information and cooperates with other US government agencies and intelligence agencies. Banks must inform FinCEN of any concerns they have regarding transactions conducted in U.S. dollars, even if the transactions themselves were executed outside the United States.

A suspicious activity report, or SAR, is an example of how banks file and communicate such suspicious activity reports. The bank fills out a SAR if it is concerned about the actions of any customer, and the report is sent to FinCEN.

Why is this important?

They often try to legalize profits from criminal activity by inventing various methods for this.

Money laundering is the process of transferring “dirty money” (such as drug proceeds or profits from corruption schemes) into an account at a reputable bank, where it cannot be traced back to the crime.

A similar process is also used when it comes to a person or company that has been sanctioned to prevent money from being transferred to Western banks.

Banks must ensure that they do not help their clients launder money or move finance around current restrictions.

On the subject: US sued for $ 100 million Russian, laundered $ 4 billion through Bitcoins

By law, banks must know who their customer is. That is, it is not enough to simply file SAR and continue working with clients' dirty money, expecting government agencies to tackle the problem.

If the bank has evidence of its clients' criminal activity, it will temporarily stop the movement of their money.

The leaked FinCEN documents "helped highlight how banks know about the vast flows of dirty money around the world," says Fergus Shive of the International Consortium of Investigative Journalists (ICIJ).

According to him, the documents refer to incredibly large amounts of money. Reporters obtained FinCEN files containing information on transactions amounting to about $2 trillion - but this is only a small part of the SAR reports filed during that time period.

What did you manage to find out?

• HSBC allowed scammers to move millions of dollars of stolen money around the world, even after the bank learned from American investigators that the scheme their clients were using was fraudulent.
• JP Morgan allowed one company to transfer more than a billion dollars through a bank account in London without even knowing who owns the company. The bank later discovered that the company may have been owned by a man who had been among the top ten most wanted criminals in the United States for several years.
• Documents obtained by Panorama also indicate that one of Russian President Vladimir Putin's closest associates, Arkady Rotenberg, used the London-based Barclays bank to circumvent Western sanctions. Part of the money went to purchase works of art.
• The Financial Crimes Unit of the US Treasury Department calls the UK a “high-risk jurisdiction”. The country was given this description due to the number of companies registered in the country that appear in SAR reports. More than 3000 British companies are recalled in the FinCEN files, more than from any other country.
• The central bank of the United Arab Emirates did not respond to the warning or take action against one local company that helped Iran evade sanctions.
• Deutsche Bank moved the dirty money of people associated with organized crime, terrorists and drug dealers.
• Standard Chartered continued to move money to Arab Bank years after the latter's client accounts were used to finance terrorism.

How is this leak different from previous

In recent years, there have been a number of major leaks of financial information, in particular:

• "Paradise Papers", 2017. Investigative journalists received a huge batch of documents from offshore law firms Appleby and Estera. The two companies operated together under the Appleby name until Estera became independent in 2016. The documents revealed the offshore financial transactions of politicians, celebrities and businessmen.
• Panama Papers, 2016. Journalists were provided with documents from law firm Mossack Fonseca, which helped to learn more about how wealthy people around the world use offshore tax regimes to their advantage.
• Swiss Leaks, 2015. Documents from the Swiss branch of HSBC showed how the bank used the country's bank secrecy laws to help clients evade taxes.
• Luxembourg Leak (LuxLeaks), 2014. The journalists got the documents of the auditing firm PriceWaterhouseCoopers showing how large companies used Luxembourg to optimize and reduce taxes.

The FinCEN file leak differs from all previous cases in that these are not just documents of one or two companies, but files that came from different banks and from different countries.

Bank reports and the companies and people referenced in them show a wide range of suspicious activities. The documents also raise the question of why banks that noticed these actions did not always take steps to somehow respond to their concerns.

The US Treasury Department said that the leak and publication of the department's documents could pose a threat to US national security, compromise investigations, and also jeopardize the safety of institutions and people who provide the authorities with reports of suspicious transactions.

Last year, the US Treasury Department announced a possible overhaul of its anti-money laundering programs.

How a friend of Putin escaped sanctions thanks to a British bank

One of Vladimir Putin's closest friends, Arkady Rotenberg, may have used Barclays Bank in London to launder money and evade sanctions, according to the leaked FinCEN documents. Rotenberg himself called this information nonsense, writes Air force.

Sanctions against Rotenberg were imposed by the US and the EU in 2014. Western banks were banned from doing business with him.

Barclays said it is adhering to its obligations that the law and regulators impose on the bank.

The leaked confidential documents show how companies likely controlled by Rotenberg used secret accounts.

Sanctions against businessmen Arkady Rotenberg and his brother Boris were introduced on March 20, 2014. The US Treasury Department accused them of involvement in the annexation of Crimea. The department believes that both belong to the inner circle of the Russian president.

According to the US Treasury Department, the Rotenberg brothers “provide support for Putin’s personal projects” and “earned billions of dollars from contracts for Gazprom and the Sochi Winter Olympics awarded to them by Putin.”

In 2018, the United States added Arkady Rotenberg’s son Igor to the sanctions list. The goal is to block access to the Western financial system. However, the Rotenbergs appeared to be able to continue moving money through the UK and US.

Money for art

In 2008 Barclays opened an account for the Advantage Alliance. From the FinCEN files, it follows that from 2012 to 2016, the company carried out transactions for $ 77 million. Many of them occurred after the sanctions were imposed against the Rothenbergs.

In July this year, the US Senate accused the Rothenbergs of secretly buying art to evade sanctions. One of the companies participating in the scheme was the Advantage Alliance.

American investigators concluded that there is evidence that the Advantage Alliance is owned by Arkady Rotenberg and that the company used its London account to acquire millions of dollars in art.

On the subject: U.S. Senate report: Russian oligarchs secretly bought art to bypass sanctions

The report noted that “secrecy, anonymity and loopholes in the rules have created an environment that facilitates money laundering and sanctions evasion,” while auctions in the United States and Britain “failed to raise basic questions” about buyers of works of art.

Despite the sanctions, Arkady Rotenberg, apparently, could have paid $ 7 for a painting by René Magritte.

On June 17, 2014, a company associated with Arkady Rotenberg transferred $ 7 from Moscow to the Advantage Alliance account at Barclays Bank in London. The next day, Barclays sent cash to an art dealer in New York.

Closed account

In April 2016, Barclays launched an internal investigation into several accounts that the bank believed could be related to the Rothenberg brothers. Six months later, the bank closed the account of Advantage due to suspicions that it could be used to move suspicious funds.

However, leaked suspicious activity reports indicate that other company accounts at Barclays, likely linked to Rotenberg, remained open until 2017. One such company is Ayrton Development Limited.

According to the documents, Barclays considered Ayrton's activities suspicious and concluded that "[Arkady] Rotenberg is the real owner of Ayrton."

“We believe that we comply with all obligations imposed on us by law and regulatory authorities, in particular those relating to US sanctions,” Barclays said. “Because the provision of a SAR does not in itself indicate any violation of the law, we terminate customer relationships only as a result of a thorough and objective investigation and analysis of the facts, weighing the suspicion of potential financial crime against the risk of closing the accounts of an innocent customer.”

The Rotenberg brothers declined the BBC's request for comment. After the publication of the material, Arkady Rotenberg, through his representative, told RBC that the information about the transaction through Barclays was “nonsense.”

The rest of the family also told the publication that they did not use English banks for payments and did not own Ayrton.

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