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Leak reveals $2tn of possibly corrupt US financial activity

Leak reveals $2tn of possibly corrupt US financial activity

Among those named in reports is Paul Manafort, former political strategist for Donald Trump
Thousands of documents detailing $2 trillion (£1.55tn) of potentially corrupt transactions that were washed through the US financial system have been leaked to an international group of investigative journalists.

The leak focuses on more than 2,000 suspicious activity reports (SARs) filed with the US government’s Financial Crimes Enforcement Network (FinCEN).

Banks and other financial institutions file SARs when they believe a client is using their services for potential criminal activity.

However, the filing of an SAR does not require the bank to cease doing business with the client in question.

The documents were provided to BuzzFeed News, which shared them with the International Consortium of Investigative Journalists.

The documents are said to suggest major banks provided financial services to high-risk individuals from around the world, in some cases even after they had been placed under sanctions by the US government.

According to the ICIJ the documents relate to more than $2tn of transactions dating from between 1999 and 2017.

One of those named in the SARs is Paul Manafort, a political strategist who led Donald Trump’s 2016 presidential election campaign for several months.

He stepped down from the role after his consultancy work for former Ukrainian president Viktor Yanukovych was exposed, and he was later convicted of fraud and tax evasion.

According to the ICIJ, banks began flagging activity linked to Manafort as suspicious beginning in 2012. In 2017 JP Morgan Chase filed a report on wire transfers worth over $300m involving shell companies in Cyprus that had done business with Manafort.

The ICIJ said Manafort’s lawyer did not respond to an invitation to comment.

A separate report details over $1bn in wire transfers by JP Morgan Chase that the bank later came to suspect were linked to Semion Mogilevich, an alleged Russian organised crime boss who is named on the FBI’s top 10 most wanted list.

A JP Morgan Chase spokesperson told the BBC: “We follow all laws and regulations in support of the government’s work to combat financial crimes. We devote thousands of people and hundreds of millions of dollars to this important work.”

According to BBC Panorama, the British bank HSBC allowed a group of criminals to transfer millions of dollars from a Ponzi scheme through its accounts, even after it had identified their fraud.

HSBC said in a statement: “Starting in 2012, HSBC embarked on a multi-year journey to overhaul its ability to combat financial crime across more than 60 jurisdictions.” It added: “HSBC is a much safer institution than it was in 2012.”

In a statement released earlier this month FinCEN condemned the disclosure of the leaked documents and said it had referred the matter to the US Department of Justice.

“The Financial Crimes Enforcement Network is aware that various media outlets intend to publish a series of articles based on unlawfully disclosed suspicious activity reports (SARs), as well as other sensitive government documents, from several years ago,” it stated.

“As FinCEN has stated previously, the unauthorised disclosure of 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.”
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