British banks have been accused of enabling fraudsters, criminals and money-launderers, following a leak of secret files.
A cache of more than 2,000 suspicious activity reports (SARs) – those filed to the authorities by banks who suspect wrongdoing – reportedly contains allegations that a number of major UK lenders allowed dirty money to flow through their accounts.
Over 100 global organisations reported on the so-called FinCEN Files, which were obtained by BuzzFeed News and shared with the International Consortium of Investigative Journalists (ICIJ). Allegations in the consortium’s reporting include that HSBC allowed money from a Ponzi scheme to be transferred around the world and that a close associate of Vladimir Putin, the Russian president, may have used Barclays to launder money and avoid sanctions.
The SARs contained in the leak cover more than $2 trillion (£1.5 trillion) worth of transactions, conducted between 1999 and 2007.
NEW: Together with @buzzfeednews and 108 other media organizations we reveal the #FinCENFiles – our latest cross-border investigation.
Using super secretive bank documents and months of reporting, we expose how banks fail to stop dirty money flows. https://t.co/hBG1poGsho
— ICIJ (@ICIJorg) September 20, 2020
Produced by banks’ compliance officers, the reports are not evidence of wrongdoing, but are aimed at alerting authorities to potentially suspicious transactions. However, lenders are supposed to block transactions if they have evidence of criminal activity.
The ICIJ’s Fergus Shiel said the report showed that money for drug cartels, corrupt regimes, arms traffickers and other international criminals continued to be moved around, and how a “broken US-led enforcement system perpetuates business as usual”.
HSBC said it does not comment on suspicious activity reporting. Responding to the allegations, the lender said it “embarked on a multi-year journey to overhaul its ability to combat financial crime” from 2012 onwards. It added: “HSBC is a much safer institution than it was in 2012.”
Further reporting said that Barclays began an internal investigation into accounts it suspected were linked to oligarch Arkady Rotenberg and his brother Boris, close friends of Mr Putin, who are subject to US sanctions aimed at freezing them out of the Western financial system.
In a statement, Barclays said “we believe that we have complied with all our legal and regulatory obligations, including in relation to US sanctions”.
BuzzFeed also reported that the Financial Conduct Authority accused Deutsche Bank in a 2016 letter of being willing to take on “very profitable clients, regardless of financial crime risks”. The City watchdog went on to exonerate Deutsche’s senior management.
Deutsche Bank said the ICIJ “has reported on a number of historic issues”. “The issues have already been investigated and led to regulatory resolutions in which the bank’s cooperation and remediation was publicly recognised,” it said in a statement. “Where necessary and appropriate, consequence management was applied.”
It added: “SARs are alerts of potential issues, not proven facts.”