FinCEN files: 6 Pakistani banks are named in the suspicious bank transactions


Syed Tahir Rashidi

UP to a billion dollars a month went through an international money-laundering network whose Russian operators charged those using the service a 5 per cent fee, according to a classified US report. The FinCEN files are the result of extensive international research on money laundering and financial crime. They show how dirty money is shuffled around the world and how banks fail to stop this flow of money. FinCEN Files is a cross-border investigation based on secret documents that exposes how banks and regulators have failed the public by allowing dirty money to flow unchecked around the globe. It shows how politicians, crooks, and tycoons – from Benin to Venezuela to Turkmenistan – profit at the expense of governments and ordinary people. The FinCEN files are more than 2,500 documents, most of which were files that banks sent to the US authorities between 2000 and 2017. They raise concerns about what their clients might be doing. The files include more than 2,000 suspicious activity reports (SARs), filed by financial institutions to the Financial Crimes Enforcement Agency, or FinCEN, a part of the US Treasury Department. They also include 17,641 records obtained through Freedom of Information (FOI) requests and other sources. But the consequences are profound, as narcotraffickers, smugglers and Ponzi schemers shift illicit profits beyond the reach of authorities, and despots and corrupt captains of industry swell their own ill-gotten fortunes and consolidate power, aided by the powerful and the banking system. The FinCEN Files are based on Suspicious Activity Reports (SARs). These are records of money movements that the banks themselves compile and submit to the US Department of the Treasury, when they suspect a possibly suspicious activity. A review of the files casts a disturbing spotlight on the complex trail left by nearly $2 trillion (€1.7 trillion) of suspicious funds being maneuvered around the globe — and on the role of banks. So let’s round up the other major leaks of the past decade. In all, the ICIJ reported that the files contained information about more than US$2 trillion (S$2.7 trillion) worth of transactions between 1999 and 2017, which were flagged by internal compliance departments of financial institutions as suspicious. The ICIJ report said in some cases the banks failed to report suspect transactions until years after they had processed them. The SARs also showed that banks often moved funds for companies that were registered in offshore havens, such as the British Virgin Islands, and did not know the ultimate owner of the account, the report said. Among the types of transactions highlighted by the report: funds processed by JPMorgan for potentially corrupt individuals and companies in Venezuela, Ukraine and Malaysia; money from a Ponzi scheme moving through HSBC; and money linked to a Ukrainian billionaire processed by Deutsche Bank.  The banks named are Allied Bank, United Bank (UBL), Habib Metropolitan Bank, Bank Alfalah, Standard Chartered Bank Pakistan, and Habib Bank (HBL). All the suspicious transactions took place in 2011 and 2012.  Buzzfeed News had shared with ICIJ more than 2,100 suspicious activity reports, or SARs, filed by global banks to the U.S. Treasury Department’s intelligence unit, the Financial Crimes Enforcement Network, known as FinCEN.  According to the investigation, global banks moved more than $2 trillion between 1999 and 2017 in suspicious payments, and flagged bank clients in more than 170 countries who were identified as being involved in potentially illicit transactions.  Banks file SARs when they believe a client is using services for potential criminal activity, though the filing in itself does not require a bank to stop doing business with a client.  According to the data revealed by ICIJ, 29 such suspicious transactions to and from Pakistan were flagged. Of those, the ‘received’ transactions amounted to $1,942,560, while the ‘sent’ transaction was $452,000. Allied Bank had 12 suspicious transactions flagged, receiving $1,001170; UBL had eight transactions flagged, receiving $399,620; Habib Metro had two transactions flagged, receiving $74,980; Bank Alfalah had three transactions flagged, receiving $99,480 and sending $452,000; Standard Chartered had four transactions flagged, receiving $199,860; and HBL had one transaction flagged, receiving $167,450.  Out of the 29 transactions, Standard Chartered filed 28 SARs with FinCEN, while The Bank of New York Mellon Corp., filed one. All of these transactions took place between September and December 2012, except for one transaction that took place in November 2011.

(-The writer is a Freelance Writer, Reviewer and Journalist. )




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