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BuzzFeed Has Dug Up Damning Bank Documents

Newser — Neal Colgrass

The new Panama Papers are out, and they're just as ugly—if not worse. Leaked government documents show that big banks are laundering untold trillions of dollars for shady operators around the world and getting away with it, BuzzFeed reports.

JPMorgan Chase and HSBC appear to be among the banks moving huge sums for drug kingpins, corrupt leaders, terrorists, organized crime groups, and others seeking to launder illicit funds and make them available in respectable bank accounts.

The papers, known as the FinCEN files, were compiled by reporters and shared with over 100 media organizations across 88 countries. For more:

  • File and forget: The documents include over 2,100 suspicious activity reports, or SARs, which banks and financial firms file with the US Department of Treasury's Financial Crimes Enforcement Network, or FinCEN, when banks fear a client is breaking the law.

But some experts say SARs are filed and mostly forgotten. The feds rarely crack down and the banks continue funneling the money while amassing billions of dollars in fees, per the International Consortium of Investigative Journalists.

  • Most Wanted: In one case, the BBC reports that a shady shell company called ABSI Enterprises funneled more than $1 billion in transactions through a JPMorgan account.

The bank had reasons to be suspicious, and later learned the company might be owned by an underworld figure on the FBI's Most Wanted List.

  • North Korea: Chinese firms and shell companies laundered more than $174 million through US banks to North Korea's regime over several years, NBC News reports.

A former Treasury official calls it "a concerted attack by the North Koreans to access the US financial system" to avoid international sanctions.

  • Terrorists: The UK-based Standard Chartered bank helped clients at Arab Bank access America's financial system even after regulators rang alarm bells about money laundering at Arab Bank, per the ICIJ.

US officials later said Standard Chartered had "schemed with the Government of Iran" to allow $250 billion in under-the-radar transactions that left "the US financial system vulnerable to terrorists, weapons dealers, drug kingpins and corrupt regimes."

  • Manafort: BuzzFeed used the SARs cache to run stories in 2018 about secret payments to shell companies overseen by former Trump campaign chair Paul Manafort, who's now serving federal time in a case that hinged mostly on those transactions.
  • Fentanyl: A fentanyl drug ring stretching back to China also benefitted from the global laundering system, the Miami Herald reports.

Convicted launderer Anthony Gomes, who was arrested near Fort Lauderdale in 2017, has been linked to over $403,000 in drug-connected money transfers.

  • Putin: Other alleged transactions include billions of dollars smuggled out of Ukraine, millions funneled by a Ponzi scheme in Hong Kong, and evidence that a close Vladimir Putin associate used Barclays Bank in London to avoid Western sanctions, per ICIJ.
  • Solution? Fines don't seem to help.

HSBC, JPMorgan, and Standard Chartered are among banks that each paid $1 billion-plus fines for allowing illegal transactions, but continued to deal with shady companies.

  • Arrest them: The feds could try to break the shell-company game by forcing companies to reveal their owners to the Treasury Department.

Or authorities could kill the file-and-forget SARs system. But "the most powerful way to fix the problem might be the simplest: Arrest the executives whose banks break the law," says BuzzFeed.

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