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FinCEN Files show trillions in tainted dollars flow freely through major banks

• oh_sigh 6y ago
  Is dark money like this somehow more lucrative for banks than just regular, say, business banking money?
  • thelazydogsback 6y ago
    My guess is that the amounts are large, and there would be less complaints from the participants if the bank holds on to the money longer to maximize their vig. Of course, there could be some off-the-books incentives for deal-makers at the banks.
    • rogerkirkness 6y ago
      Compared to alternatives, high fees are better than being unbanked. Like payment gateways that let you sell THC.
  • dsabanin 6y ago
    Bribes to top management? Criminal organizations infiltrating banks?
  • coliveira 6y ago
    Criminals deal with hard money and liquid assets, while most people have money invested in businesses and real estate. They also don't complain about big fees. So it is advantageous for banks to work with dark money.
  • SpicyLemonZest 6y ago
    There's a strong culture in banking - not universal, but strong - that regulations are just a game being played between your institution and the regulators. A banker who steps just to the edge of being slapped down by regulators is seen as a much more positive figure than a restauranteur who just barely passes the health inspection or a loan shark who charges exactly the maximum allowed.
    • valuearb 6y ago
      Because regulations are wrong headed and injurious to honest customers.
  • throw0101a 6y ago
    No necessarily, but there's quite a bit of it sloshing about and if one can get a piece of the action, and the associated fees, it is profitable. Deutsch Bank did quite a bit of it it appears: * https://www.theguardian.com/business/2020/feb/16/dark-towers-review-deutsche-bank-donald-trump https://www.theguardian.com/business/2020/feb/16/dark-towers... See also many banks in Cyprus and their association with Russian oligarchs. * https://www.theatlantic.com/business/archive/2013/03/everything-you-need-to-know-about-the-cyprus-bank-disaster/274096/ https://www.theatlantic.com/business/archive/2013/03/everyth... * https://www.bbc.com/news/business-21831943 https://www.bbc.com/news/business-21831943 Supposedly toned done in recent years: * https://www.bnnbloomberg.ca/cyprus-loses-luster-as-mediterranean-haven-for-russian-business-1.1196047 https://www.bnnbloomberg.ca/cyprus-loses-luster-as-mediterra...
  • corford 6y ago
    According to the article, banks were indeed able to command higher premiums/margins on cash flows subverting Iranian sanctions.
• ECA_stax 6y ago
  The ICIJ and ProPublica consistently put out the highest quality investigative journalism, exposing injustices committed by some of the biggest institutions in the world. Blows mainstream media out the water. I strongly recommend users here to donate to both, and even to cancel subscriptions to major media institutions, who have opted to dropped investigative journalism for sensationalism. [1] https://checkout.fundjournalism.org/memberform?org_id=icij&installmentPeriod=monthly&amount=10&campaign=701f4000001A4kF https://checkout.fundjournalism.org/memberform?org_id=icij&i... [2] https://donate.propublica.org/give/141278/#!/donation/checkout https://donate.propublica.org/give/141278/#!/donation/checko...
  • reaperducer 6y ago
    Blows mainstream media out the water. Because its reporters are from the "mainstream media." Often reporters who could not get any further in their old companies, or who were cut from their organizations due to budget cuts. cancel subscriptions to major media institutions ...and that's why those budgets got cut, and large media organizations became more reliant on advertising money, instead of subscriber money. News isn't free. It's good that you appreciate strong journalism. But robbing Peter to pay Paul doesn't work. Even if your local newspaper is terrible, you should still support it financially so that good people can still try to do good work, and not disappear altogether. My local paper is bad. But I subscribe, and reading it (actually reading, not looking at a web site) have learned that there are good people there trying to do good work. Between the lines you can see that they are underfunded, and do a lot with very little. I also subscribe to large, award-winning important journalistic endeavors. "Real news," as it were. But I also know that award-winning journalism doesn't magically appear out of thin air, or straight from journalism schools. Those reporters have to learn their trade at small newspapers, television stations, and radio outlets to work their way up to the big leagues. If we don't support local reporters, there won't be any smart journalists in the future.
    • spurdoman77 6y ago
      "News isn't free. It's good that you appreciate strong journalism. But robbing Peter to pay Paul doesn't work. Even if your local newspaper is terrible, you should still support it financially so that good people can still try to do good work, and not disappear altogether." No. If you pay the same money to Paul who creates better content, you are voting with your wallet. Everyone should do that. Definitely dont stay with sucky provider but give the same money (or more) to someone better, that helps things to develop.
• netsharc 6y ago
  Huh, I've always thought the banks were afraid of touching money from sanctioned people because of fear of the American freeze-out: if a bank lands in the list, then American institutions (AFAIK) can't do business with them, so no money tansfers from American banks to their clients (indeed from any bank, because that bank would also be breaking the American law), and they wouldn't be able to work with VISA or MasterCard, things any bank would need to do to be successful as a bank. But I guess nowadays these banks have even less to worry about, because the occupant of the White House is at least a corrupt twit, and at most someone helped by Putin so Putin and his friends could put their money back into the global economy without the involved handlers/recipients fearing US crackdown. ("But every word of the Mueller report was a complete hoaxed fabrication!", will come the unnuanced defense).
  • markus_zhang 6y ago
    There could be different motives for different parties though. A bank manager who just wants some quick money and retire in a few years wouldn't care too much about long term consequences.
• tehjoker 6y ago
  Remember BCCI? https://www.newsweek.com/cia-and-bcci-202850 https://www.newsweek.com/cia-and-bcci-202850
  • markus_zhang 6y ago
    Yeah and I love the movie adapted.
    • tehjoker 6y ago
      Didn't know there was a movie! I'll have to check it out.
      • markus_zhang 6y ago
        Should be this one: https://www.imdb.com/title/tt0963178/ https://www.imdb.com/title/tt0963178/
  • AndrewBissell 6y ago
    Depressing to think that the kind of oversight which was exercised in BCCI's case, going so far as to shut the bank down entirely, seems almost impossible in this day and age.
• ckastner 6y ago
  I haven't looked into the individual cases this is about and I'm certain that some crossed a line, but with regards to the following: > The leaked documents, known as the FinCEN Files, include more than 2,100 suspicious activity reports filed by banks and other financial firms with the U.S. Department of Treasury’s Financial Crimes Enforcement Network. First, the banks actively filed these reports, so it's not like they were trying to hide these transactions. The ones they really wanted to hide, you won't find in these reports. Second, the bar for "suspicious activity" is usually set quite low -- it's usually literally just activity that doesn't seem 100% kosher. You don't know of any wrong-doing (because if you did, you'd be an accomplice), but something just does not smell quite right. Banks report these because they are required to. If they don't and they get caught in an audit, there are hefty fines. Edit: Note that these reports are filed immediately when the activity occurs and regulators can jump onto the activity straight away. So while one can accuse many banks of committing many sins, a suspicious activity report is not something that I would normally consider sinister.
  • jandrese 6y ago
    One can also hide things by sending an overwhelming amount of noise to drown out the signal.
    • ckastner 6y ago
      Regulators aren’t completely inept and will catch on to this. Edit: to elaborate, too many false positives will be interpreted as a broken AML policy and that alone is already grounds for penalty.
    • valuearb 6y ago
      They are required by law to file SARs. If the huge volume of SARs are overwhelming the regulators, perhaps the regulators should not have set the requirements so ridiculously broad for filing them.
      • Nasrudith 6y ago
        It sounds like inflation and legislature's stubborn refusal to index value thresholds to inflation or cost of living for whatever reason (innumeracy, a desire to sneak in laws becoming stricter over time, wanting to set up future opportunities for horse-trading) is partially to blame. $25,000 isn't trivial but it is less than it used to be.
• markus_zhang 6y ago
  aside from BCCI mentioned by another commentor please also Google Michele Sindona and the Vatican bank.
• kingkawn 6y ago
  That’s what banks are there to do
• Apocryphon 6y ago
  So how is cryptocurrency supposed to improve this problem?
  • lawn 6y ago
    It doesn't. But it's worth noting that an argument against cryptocurrencies is that it would give criminals and others free reign as there would be no built-in checks to prevent them. Yet as we see these checks are ineffective, weakening the argument against cryptocurrencies.
    • jariel 6y ago
      "Yet as we see these checks are ineffective" ? They are highly effective. It would be like saying 'police are ineffective in suppressing crime' when without them, the streets would explode with crime within a few days. Everything (your bank account, your pay pal, your stripe, your accountant, your financial advisor) is monitored because without it it would be a hey day for financial corruption, money laundering etc..
      • pessimizer 6y ago
        > It would be like saying 'police are ineffective in suppressing crime' when without them, the streets would explode with crime within a few days. Or like saying my rain dance doesn't actually make it rain although if I stopped dancing, the world would be a desert.
        • jariel 6y ago
          ? These comments about not understanding the nature of policing are so bizarre it's hard to understand the pop psychology in effect here. I think either young people, or a certain kind of person, for some reason develops an odd intuition for what people are, how people behave, what civilization actually is. Most people behave fairly well, largely because we're socialized strongly into that. But the moment that the rules are lifted - literally that moment - then 5% of us take advantage of that and that's all it takes for chaos. If the government announced 'no policing' then most banks and stores would be robbed immediately. At least 20% of would just 'go with the chaos' seeing 'free stuff to be had, sucker to wait around' and anything not protected would be looted. There would be violent standoffs between people hired to protect stuff and people wanting to steal. That chaos would descend very quickly into regular social life, people hurting each other out of revenge, vendetta, traffic rage etc.. The 'psychopaths' violence would very quickly escalate way outside their circles. We have the social experiment already, in 1969 Montreal (generally very peaceful, very few guns etc.) went on strike and within hours the city was in chaos. Here is Stephen Pinker's personal recollection as he was a young idealistic man then: “As a young teenager in proudly peaceable Canada during the romantic 1960s, I was a true believer in Bakunin’s anarchism. I laughed off my parents’ argument that if the government ever laid down its arms all hell would break loose. Our competing predictions were put to the test at 8:00 a.m. on October 7, 1969, when the Montreal police went on strike. By 11:20 am, the first bank was robbed. By noon, most of the downtown stores were closed because of looting. Within a few more hours, taxi drivers burned down the garage of a limousine service that competed with them for airport customers, a rooftop sniper killed a provincial police officer, rioters broke into several hotels and restaurants, and a doctor slew a burglar in his suburban home. By the end of the day, six banks had been robbed, a hundred shops had been looted, twelve fires had been set, forty carloads of storefront glass had been broken, and three million dollars in property damage had been inflicted, before city authorities had to call in the army and, of course, the Mounties to restore order. This decisive empirical test left my politics in tatters (and offered a foretaste of life as a scientist).” [1] If one takes a moment to think about it, it's so obvious though, what's 'interesting' about it is why people would think the result would be too far away from this one way or another. Anyhow: there are tons of regulations at every level of banking, and that's why you don't see financial fraud on every corner. [1] Pinker, Steven (2003). The Blank Slate. Penguin Books. p. 285. ISBN 0-14-200334-4.
• coliveira 6y ago
  For people interested about how and why banks deal with criminals, the best book I know is this: "Hot Money and the Politics of Debt", by R. Naylor.
• victorbstan 6y ago
  The US has a criminal for a president. They have no credibility.
  • sky_rw 6y ago
    Obama hasn't been president for 3 1/2 years now.
    • criley2 6y ago
      The idea that such an ignorant and partisan response would be found here really speaks to how bad this community has become Donald Trump has been credibly accused of dozens of felonies, including by Special Counsel Mueller, who said he wanted to charge Trump with 11 felonies but was prevented by the AG, and who said that these felonies (and more) are chargeable after his term. This is a man who has seen no less than 6 of his closest advisors and lawyers go to jail for crimes he asked them to commit. Who was an "Unindicted Co-conspirator" to crimes that landed people in prison. 0 members of the Obama administration went to jail. There were 0 special counsels. There were 8 investigations into Benghazi which found 0 crimes --- the comparisons between these two administrations is one of the largest differences in American history. To conflate the two is ignorance and rancid partisanship.
      • sky_rw 6y ago
        It was a tongue in cheek response to the original ignorant and partisan response. Don't get so triggered bro.
        • dang 6y ago
          Would you please stop posting flamebait to HN? We ban accounts that do that because it wrecks the site for the kind of conversation we want to be having here. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
          • 6y ago
• mrtksn 6y ago
  It is very hard to open your first bank account in the UK as an immigrant due to AML regulations(They require proof of address, it creates a catch 22 situation). The joke goes that you need to be a drug dealer or a warlord to easily open a bank account in the UK. Maybe it was not all jokes after all.
  • javajosh 6y ago
    This is also true in Germany (to rent a place you need a bank account, but to get a bank account you need a registered address). You almost always will need a 3rd party to help you. In my case my employer rented an apartment, and then had someone register me there, which required me assigning limited power of attorney. Then I opened a bank account with that address, and the cycle was broken. Note that this also requires a work and residence permit, which is usually going to be a blue card, which is a whole other ball of wax. So, yeah, its hard, but not impossible.
    • Scoundreller 6y ago
      Same for exchange students in France. Usually they get buddied up with someone to register at their address to get a bank account if they'll be there longer term and need their own lease.
    • luckylion 6y ago
      I'm pretty sure you can use cash deposits at a bank to pay rent. My land lords in Germany have never asked for proof of bank account, they just provided their account details and asked me to set up recurrent payments. Not every bank offers it, and it's costly (5-20€ afaik), but it works. If you have a bank account in another country, that'll work as well, you just need a way to transfer money to accounts, as few land lords will accept cash payments.
    • kxyvr 6y ago
      Same in Norway. The purpose is to put the deposit into an interest bearing account in both the name of tenant and the landlord to prevent the deposit from being stolen. Unfortunately, this catch-22 presents an undue hardship for new immigrants looking for either a place to live or a bank account. Reasonable landlords will hold the deposit in cash and give a receipt until the bank account can be obtained, but this is not strictly legal.
• throw0101a 6y ago
  The book Dark Towers on Deutsche Bank is enlightening on how many employees there ignored many "mandatory" checks and 'know-your-customer' provisions: * https://www.theguardian.com/business/2020/feb/16/dark-towers-review-deutsche-bank-donald-trump https://www.theguardian.com/business/2020/feb/16/dark-towers... DB ended up being the only 'mainstream' bank that'd deal with Donald Trump and family.
• ativzzz 6y ago
  Large companies will continue doing illegal things while reward outweighs the risk. This reminds me of pharmacy distributors that contributed to the opioid epidemic. They continue operating even when they were told not because there was no real punishment in place, and the only thing that stopped them eventually was a criminal indictment [1]. Fines do not work, because like the OP article states, the shareholders end up paying up, not the executives who let these things happen. If we want to curb this behavior, we need to do one of 4 things: 1. Criminal indictments for executives and/or the company instead of fines for breaking the law 2. Fine executives severely, to the point of bankrupcy, on top of fining the company 3. Significantly increase the fines against the company, maybe a magnitude of 100-1000x, to the point where breaking the law flagrantly may result in bankruptcy or dissolution of the company. A fine should not just be "cost of doing business" 4. Prevent the company from doing business in an area where they broke the law. E.g - if they launder money illegally for a Ukranian businessman, forbid them from doing any business in Ukraine for several years. This one is more nebulous and may not work effectively for banks. Worked for shutting down opioid distribution for certain localities[2]. [1] https://www.npr.org/2019/04/23/716571375/drug-distributor-and-former-execs-face-first-criminal-charges-in-opioid-crisis https://www.npr.org/2019/04/23/716571375/drug-distributor-an... [2]https://www.pharmacytimes.com/news/oxycodone-supplier-shut-down-due-to-massive-shipments https://www.pharmacytimes.com/news/oxycodone-supplier-shut-d...
  • valuearb 6y ago
    You advocate terrible policy. Someone sets up a bank to serve their community, taking investors from all over your area. They take deposits, make loans to help the community grow. The management team is great at training staff to follow all banking regulations. The bank grows to hundreds of branches. Then one branch manager is bribed by a criminal to subvert banking regs and the internal control systems, so they can launder millions of dollars. You would prosecute the CEO for unknowingly employing a criminal? Or senior execs for unknowingly having security holes a clever employee could buy pass (when all control systems can be bypassed by clever employees)? You’d increase fines to bankrupt the Company and wipe out investors investment fir the crime of hiring an honest CEO and execs who got fooled by one bad Apple? Intent matters.
• mensetmanusman 6y ago
  It’s hard to take the US seriously until they clean house: https://www.theatlantic.com/magazine/archive/2019/03/how-kleptocracy-came-to-america/580471/ https://www.theatlantic.com/magazine/archive/2019/03/how-kle...
• valuearb 6y ago
  Terrible example of “muck raking” where the authors paint a wide range of different people with the same brush, while entirely neglecting the massive negative consequences of these regulations. Trying to turn the financial system into a group of cops with unlimited powers to seize your assets without trial, or even being required to disclose to the account holder why is terrible policy.
• andreskytt 6y ago
  Global banks might, but smaller regional ones close or sell businesses, exit markets an pay fines. A banking executive recently committed suicide as he was left to be responsible after his subordinates were found guilty of money laundering and the head office pushed him under the bus.
  • arkadiyt 6y ago
    Not sure what point you're trying to make here - it sucks that this individual committed suicide but it seems correct and appropriate for a manager to be held responsible for the actions of their reports.
    • jariel 6y ago
      If you are a police chief, and one of your cops takes a bribe, it does not imply your complicity.
• patrickaljord 6y ago
  The issue is that the restrictions imposed by the US government on banks are so constraining that many countries with a lot of corruption would just be cut out of the whole world banking system. This would be a death sentence for these countries as most of them are doing poorly already economically. In addition, it's not like the US itself is without corruption but because they're the one who make the rules, they don't apply to their own corrupt entities...
• heartbeats 6y ago
  I'm always sad to see people cheering this stuff on. Every time I hear someone cheering on some oligarch who got exposed doing shell corporation stuff in offshore jurisdictions (Panama Papers, etc), I die a little inside. Since 2001, we've seen drastic expansions in mass surveillance. Even if these are bad people, you wouldn't see these articles cheering on FBI employees who "cracked secret darknet encryption to catch criminals, pedophiles, and terrorists". In my view, the banks' actions are morally justified. The KYC regulations everyday people are subject to when going about their business is overbearing, and we should fight back against it. The police should investigate crimes, and banks should do banking. Banks shouldn't be government surrogates.
• nashashmi 6y ago
  I don't understand how Paul Manafort resigning makes him someone U.S. banks should not do business with. Some "criminals" are so small and so insignificant, but U.S. financial laws like the one being used in this article will drastically ruin the lives of these people. Further, like others said, these financial laws do not allow the prosperity of those marginalized or who never entered the financial globalization system.
  • justanotheranon 6y ago
    Paul Manafort engineered the Maidan Coup in Ukraine. he was the money guy, who facilitated moving CIA's cash into Ukraine to bribe the right people in order to pull off the coup. in the voluminous text messages of Manafort's daughter which were leaked, one message stands out. Manafort's daughter tells her brother "do you realize our money is blood money?" Manafort is precisely the type of "Lord of War" figure who deserves to be splatted like a bug with aggressive and expansive money laundering surveillance systems.
    • mikeyouse 6y ago
      What in the world? You do know Manafort was being paid millions of dollars in laundered money by the dictator who was overthrown in the “coup” right? https://time.com/5003623/paul-manafort-mueller-indictment-ukraine-russia/ https://time.com/5003623/paul-manafort-mueller-indictment-uk...
• Kosirich 6y ago
  Here is another one with Danske Bank's money laundering case. It seems there is fresh development on the case: https://finans.dk/erhverv/ECE12426633/medier-haardkogte-kriminelle-brugte-danske-bank-til-hvidvask/?ctxref=ext https://finans.dk/erhverv/ECE12426633/medier-haardkogte-krim... (use google translate, Danish to English is pretty much spot on) As for the how to prevent this, as many have stated, punishment should fit the crime and it should work as prevention to people who wield extraordinary amounts of power. If the crime is "to knowingly and deliberately, for the sake of acquiring wealth, empower a criminal or terorist organization by using one of the societies (or economies) most important institutions" then the punishment should definitely fit the crime and I think we all know what it needs to be.
• quattrofan 6y ago
  Can someone please go to prison this time, and I mean a CEO not some mid level fall guy.
  • valuearb 6y ago
    Which CEO? And for what? The crime of not knowing mid level employees were bribed to subvert regulations?
• originalvichy 6y ago
  Until CEOs face jailtime even after their departure from the company this will not change. Corporations and LLCs lack social accountability comparable to the accountability private citizens have.
  • valuearb 6y ago
    What Bank CEO explicitly approved braking banking regulations?
    • detaro 6y ago
      That's a bit too easy, responsibility of a leader shouldn't end at "nobody asked me for permission". (Where exactly to draw the line and how to decide penalties is of course a giant can of worms, it also doesn't really make sense to harshly punish executives for everything that happens downstream of them. I do not want to imply that there is a simple answer to this)
    • originalvichy 6y ago
      ”I didn’t know I was breaking the law” is not a valid excuse for a private person and it shouldn’t be for an executive either. A company big enough that the execs don’t know about day-to-day operations should have processes in place that would notify them if something illegal was going on.
      • valuearb 6y ago
        That’s like saying parents should be arrested for their children’s crimes. The only systems in place that can notify CEOs or parents of all illegal events in their organizations exist only in fantasyland. And ignorance of the law should be an excuse, when the US has so many laws on the books that nearly every adult is guilty of committing at least one felony unknowingly.
  • refurb 6y ago
    I love HN. “America has the highest per capita prison population and that’s wrong” “We should work on rehabilitation, not punishment like prison” “It’s stupid to put people in prison it’s so expensive and just leads them to commit more crimes when they get out” A white collar crime has been committed? “Throw them the CEO and all the executives in jail for decades and levy fines so high it bankrupts them!”
• doonesbury 6y ago
  Qouting "documents identify more than $2 trillion in transactions between 1999 and 2017 that were flagged by financial institutions’ internal compliance officers as possible money laundering or other criminal activity — including $514 billion at JPMorgan and $1.3 trillion at Deutsche Bank." So what's the claim here? banks should have not wired money or the doj looked the other way and did nothing when there was suggestion of fraud?
• f0ok 6y ago
  It's good to know which banks will be willing to accept my sizable money transfer in case the authorities are after me.
• whoisninja 6y ago
  and an avg guy has to do KYC and what not to move $100... some of those min. threshold numbers ($10,000) that invoke financial reports are 30-40 years old so not inflation adjusted. So now those are basically surveillance tools on the lives of masses for no real purpose but instead become attack vectors.
• justanotheranon 6y ago
  how many people went to prison as a consequence of the Panama Papers, Bermuda Leaks, Offshore Leaks, and the recent DOSSecrets leaks of UK territory money laundering banks? zero. no, wait, one 71 year old guy who evaded taxes by naming his 93 year old mother as the owner of his offshore shell companies did get indicted by DOJ for tax evasion on an amount of income less than $5 million. i have zero faith in The Powers That Be in our legal system to ever systematically hunt down and crush the multi-trillion dollar shadow economy. DOJ are as good as being the protectors of the Int'l Financial Mafia Syndicates. sadly, i used to hope more vigilante hackers like Phineas Phisher breaching and leaking and doxxing these Shadow Economy overloards would solve the problem. In many ways, hacking made it worse because now the Shadow Economy is spending money to better conceal itself and to embed itself into the crevices of the legit economy to become more untouchable. i am especially skeptical of ICIJ because they are funded by George Soros' Open Society, which means maybe Soros is paying ICIJ to cover things up and stall for time and provide a soft landing to Int'l Financial criminals.
• alpineidyll3 6y ago
  This all makes for good press, but it's rather naive about how the global banking system works. If it were possible to decompose the flow of capital between nations into its purposes, avoidance of taxes and regulations would outweigh all other purposes 2:1. Most of this activity is viewed as legal. The only barrier to moving capital out of any tax/regulatory regime is the overhead you are capable of spending to do it and that's the only way it can be without a drastically different system of international governance. One can always perform infrastructure spending, if the needs are great. My favorite example is the island of Seipan, which was used over the last 20 years to expatriate billions and billions of dollars from China into the US. https://www.bloomberg.com/news/videos/2020-04-15/how-a-chinese-casino-conquered-a-piece-of-america-video https://www.bloomberg.com/news/videos/2020-04-15/how-a-chine... There isn't really any international enforcement body or oversight besides whenever there is outrage in the US/Europe. On paper banks doing business with US banks must extend the US enforcement regime, but there isn't really any system to ensure that's the case, and the US laws are already weak. These news stories cannot change this reality, and there's really nothing mysterious or hidden about how these funds transfers work.
• sthfixthis 6y ago
  Criminals use the obtuse, obfuscated, and oligarch serving banking system, as records are not public record. Bitcoin fixes this.
• christkv 6y ago
  I mean this is like common operations for HSBC. They did this for the cartels just a couple of years ago. A little fine and it's back to business as normal. Until CEO's and actual people go to jail this will keep happening. The profits are just too good.
• zapdrive 6y ago
  And then they turn and say Bitcoin can be used to launder money.
  • whoisninja 6y ago
    correct, it is same thing but just that circumvents their own network so they can't collect fees and have the power it gives them to control the network of global money supply
• yodon 6y ago
  This sounds like the system is working as intended. Banks are encouraged to report suspicious activity, and are encouraged to take a fee on the transactions they report as suspicious. This gives the government the info it needs to engage in prosecution and gives the banks a financial motivation to report the suspicious transactions. The report makes this obvious legislatively driven outcome sound like some sort of evil-doing complicity with villains on the part of the banks. Is there something more deeply malicious on the bank's part here than simply behaving in the way anyone reading the legislation would expect them to behave?
  • kneel 6y ago
    Banks have the power to stop obvious money laundering by shady characters by denying the transaction, instead they look the other way, send a report and collect a fee.
    • mathgladiator 6y ago
      which could be ideal if the government is trying to build a larger case. It is strategically murky to give banks the power to deny.
      • wavefunction 6y ago
        Banks have the power to deny transactions unilaterally already.
  • burkaman 6y ago
    If it's the intentional effect of legislation, does that mean it's above reproach?
  • mjw1007 6y ago
    From https://www.bbc.co.uk/news/uk-54225572 https://www.bbc.co.uk/news/uk-54225572 : « By law, they have to know who their clients are - it's not enough to file SARs and keep taking dirty money from clients while expecting enforcers to deal with the problem. If they have evidence of criminal activity, they should stop moving the cash. » If that's true, I don't think the banks are simply behaving in the way anyone reading the legislation would expect them to behave.
• xoxoy 6y ago
  I didn’t find this as scandalous as its being made out to be. Money laundering is a well known issue.
• omginternets 6y ago
  Let me get this straight: the core accusation is that banks are flagging suspicious transactions to the relevant authorities, then proceeding to process the transaction. Did I miss something? The authors seem to be implying that the banks should have blocked the transaction, to which I ask: do we really want the banks to act as judge, jury and executioner? Isn't the real scandal here that these SARs are apparently not being investigated by actual law enforcement?
  • deleted 6y ago
    [deleted]
  • rjtavares 6y ago
    You missed this: > The FinCEN Files show trillions in tainted dollars flow freely through major banks, swamping a broken enforcement system.
    • refurb 6y ago
      What does “tainted” mean? That seems like a weasel word to imply something nefarious without proof. As the OP stated. The banks are flagging these transactions as per regulations. Should we have them block every “suspicious” transaction?
      • joe_the_user 6y ago
        Quote (again): "In some cases the banks kept moving illicit funds even after U.S. officials warned them they’d face criminal prosecutions if they didn’t stop doing business with mobsters, fraudsters or corrupt regimes." The situation and the article is only slightly complicated. Why are there so many folks not getting it?
        • franciscop 6y ago
          How does the bank determine who is e.g. a mobster? If a judge, or maybe even the police says "person X is a mobster don't do transactions with them" it's pretty clear and I'm sure they'd comply. Otherwise it's again a totally ambiguous statement since it implies the bank would need to do the police's job better than the police.
• cryptica 6y ago
  The problem is not that fraudsters can move money too easily... The problem is that there are too many fraudsters to begin with. Our global monetary system is itself a fraud; so it's logical that the people who would be most likely to accumulate a lot of money in such a system are fraudsters. Don't be surprised when that dirty money starts moving around! Money will keep moving, whether it's dirty or not.
• anm89 6y ago
  This seems like the US complaining about the idea that it is possible any where in the world for financial transactions to happen that it cannot completely and directly control. I think I'm pretty ok with that. If that means that someone got to sell some cocaine in Russia I'm fine with that too. The US, with it's 135% debt to GDP, broken politics, import everything it needs and produce nothing attitude, and multitude of more organized competitors is not the hegemonic powerhouse it was when Bretton Woods or the Petrodollar arrangements happened but it expects the same concessions as it got in those eras. I think the people who expect these privileges as a birthright are in for a rude awakening.
• room505 6y ago
  Dark Towers by David Enrich talks about this and how Deutsche Bank throughout the decades became the financier for the likes of the Nazis, Trump, and the Russians. I recommend it. https://www.goodreads.com/book/show/45730424-dark-towers?from_search=true&from_srp=true&qid=sG4BmaoQrd&rank=20 https://www.goodreads.com/book/show/45730424-dark-towers?fro...
• coldtea 6y ago
  > Global banks defy U.S. crackdowns by serving oligarchs, criminals and terrorists Translation: Global banks defy U.S. by not just serving its own allied oligarchs, criminals, and "freedom fighters" but also those tied to other countries E.g. Bezos, or Carlos Slim, or some e.g. Saudi royalty sawing journalists, or even someone like Pinochet, or terrible African right-wing dictators? Good. But it's bad if you're a rich person (shady or not) from a foreign country that's not bending over backwards.
• hansjorg 6y ago
  I'm not sure if this system of reporting is good or even well intentioned, or if it might be overly authoritarian as some replies here seem to think. However, what's being argued is clearly not just that banks are diligently flagging transactions only to be ignored by law enforcement. > They [the leaked files] show banks blindly moving cash through their accounts for people they can’t identify, failing to report transactions with all the hallmarks of money laundering until years after the fact, even doing business with clients enmeshed in financial frauds and public corruption scandals. > Authorities in the U.S., who play a leading role in the global battle against money laundering, have ordered big banks to reform their practices, fined them hundreds of millions and even billions of dollars, and held threats of criminal charges over them as part of so-called deferred prosecution agreements. > A 16-month investigation by ICIJ and its reporting partners shows that these headline-making tactics haven’t worked. Big banks continue to play a central role in moving money tied to corruption, fraud, organized crime and terrorism. https://www.icij.org/investigations/fincen-files/global-banks-defy-u-s-crackdowns-by-serving-oligarchs-criminals-and-terrorists/ https://www.icij.org/investigations/fincen-files/global-bank...
  • AnthonyMouse 6y ago
    > They [the leaked files] show banks blindly moving cash through their accounts for people they can’t identify, This doesn't seem like a solvable problem in practice. In theory KYC laws require them to know who the customer is, but what does that even mean? The shell corporation whose sole purpose is to be listed as the customer of the bank? The straw man with no ties to the underlying organization who received a bag of cash to be listed as that corporation's executive? All KYC laws really do is harass innocent people who have trouble meeting their requirements. The people moving large sums illicitly can work around it by paying a fixed amount to do these kinds of shell games, which the ordinary people dealing with ordinary sums of money can't afford but the big time criminals can. > failing to report transactions with all the hallmarks of money laundering until years after the fact This sounds more like garden variety bureaucratic incompetence than some kind of malicious activity. After all, if they were actually in cahoots with the bad guys, they'd have advised them how to make their transactions not have "all the hallmarks of money laundering" to begin with. Also, a lot of perfectly legitimate transactions have "all the hallmarks of money laundering" because money laundering is, by definition, designed to look like a lot of perfectly legitimate transactions. > even doing business with clients enmeshed in financial frauds and public corruption scandals How is that not what they're supposed to do? To do otherwise would be to presume guilt rather than innocence. Imagine you get falsely accused of some kind of fraudulent activity and while you're busy proving your innocence in court, you get evicted from your house and have your car repossessed because no bank will allow you to make your loan payments while "enmeshed" in those false accusations.
• sebwi 6y ago
  Background information and overview on the problem of illicit financial flows [1,2,3,4,5] - one of the key related issues. Deficient enforcement by public agencies in industrialized countries and lack of ethical behavior by intermediaries like banks enable theft, organized crime and worse. You can always complain about the use of exaggeration in media articles but the issues and consequences for many people are very real and not to be trifled with. [1] https://en.wikipedia.org/wiki/Illicit_financial_flows https://en.wikipedia.org/wiki/Illicit_financial_flows [2] https://gfintegrity.org/issue/illicit-financial-flows/ https://gfintegrity.org/issue/illicit-financial-flows/ [3] https://journals.openedition.org/poldev/1863 https://journals.openedition.org/poldev/1863 [4] https://carnegieendowment.org/2018/10/11/security-dimensions-of-illicit-financial-flows-pub-77481 https://carnegieendowment.org/2018/10/11/security-dimensions... [5] https://iff.taxjustice.net/#/ https://iff.taxjustice.net/#/
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• ekim31 6y ago
  It seems like some of the comments are actually ok with the morals of this. There is another article right above the video titled: "Unchecked by global banks, dirty cash destroys dreams and lives." I guess we are all a bit numb unless it gets personal.
• rkagerer 6y ago
  Some of the methodology in this article seems flawed. e.g. They rank banks by the total value of suspicious activity reports (SARs) each has filed, and infer higher amounts as evidence of broken AML. I don't dispute the underlying accusations, but one could also argue SAR filings are a signal of compliance (at least compared to other banks that have undergone less scrutiny in the past and might be less vigilant in their reporting). Neither do I see any attempt to normalize the data (e.g. by number of customers).
• csomar 6y ago
  Conspiracy Theory time: The US of A is striking on big international banks to monopolize the international and offshore banking sector. As of right now, it's pretty much impossible to open a bank account anywhere in the world without being a resident in said country. There is also FATCA and FinCen which reports to America. There are also strict KYC/AML rules for opening an account and transferring funds. The Swiss "bank account" is no longer a thing. Except for the big guys who, until now, still enjoy a nice playground. But these times might be coming to an end. Compare this to the US: You can open a bank account easily, with no documentation, and it doesn't really take that much. At least for me, it worked from the first bank. Documentation? Just your passport. US address? You can use any address and you don't need to live there. Unsecured Credit Card? Yep, and if you pay up your balance monthly they'll increase your credit limit without asking. Trading stocks? No probs, just fill your taxes. Crypto? It's also okay with several US banks. I personally know one person who just moved to the US, made a transfer of $250k from an HSBC account in a foreign middle-east country and WF didn't ask any questions. Compare this to the EU where Paysera recently froze my account because I made a 1.000euro transfer.
  • pingec 6y ago
    My experience is the same in EU. If you or your company is not a resident in the country then the bank will just not want to have anything to do with you "because of too much FATCA paperwork and other requirements by US". I wonder how much this weighs down EU companies as there is no real competition in the banking industry across countries and you are kinda limited to what banks in your country offer you while still competing in the same EU market. And the disadvantage is probably even higher compared to entities with US banking.
    • csomar 6y ago
      It's funny how people often cite the EU banking system as more advanced than the US because it has instant SEPA transfers. From my experience the EU banking infrastructure is both a joke and a pain in the ass compared to the US. And yes indeed, the EU doesn't want you as a client unless you live next to the branch.
• alasdair_ 6y ago
  From reading about drug cartels, especially in Mexico, one thing I saw a few times was some variant of the following: An international bank opens a new branch in Mexico City. After everyone is settled in, one day the manager of the bank has an appointment with a new client. The client enters and hands the manager photographs of the manager’s spouse and children, all taken an hour ago at school or home. They then make it clear the manager will be receiving lots of cash which will make his numbers look fantastic, but obviously if that cash is questioned, well, the manager does’t want to see what happens. This seems like a difficult thing to deal with.
  • summitsummit 6y ago
    what are the consequences of _not_ questioning the money? can the managers boss force him to? in which cause he would have to lie and potentially falsify documents?
• hullicio 6y ago
  I used to do this for a living (evaluate flagged transactions and write SARs). The general idea here is partly right and partly wrong. The part that's right: some of the people banks employ are absolutely willing to make a dollar no matter what it takes, and they will happily look the other way when suspicious activity is pointed out to them. I found this attitude particularly prevalent among some of the salespeople. The part that's wrong: these are not mostly easy or obvious decisions. Banks don't just know that a transaction is indicative of illegal activity. A regular part of my job was debating with my coworkers about whether we should be concerned by some transactional pattern. More than once I followed bank policy and flagged activity conducted by wealthy people that turned out to be completely legal. The reality is that while some cases are cut and dry, most of them fall into some grey area and require thoughtful judgment. What makes it even worse is that preventing transactions may not even be the best course of action when suspicious activity is identified. A classic example is Paul Manafort's activity with the Bank of Cyprus. BoC compliance officers questioned Manafort about some of his activity, at which point he immediately stopped transacting through the bank. This is obviously anathema to law enforcement, who would prefer not to alert their targets. All of this is to say: AML policy in the U.S. is a big mess, and even though it's meaningful work, I'm glad I got out of it. Until there is some kind of rational regime, bank officers are damned if they do and damned if they don't.
  • vmception 6y ago
    Right, and the expected course of action isn't to freeze the customer’s funds Worst case is to end a banking relationship because the bank doesnt know what to do with them and just give them their money in a check. The transaction will still happen, multiple transactions in fact. The average case is just making the SAR and spamming the regulator. Its a dumb regime, like you said. The US should just get out of the business of spending resources on this. Which it partially seems like the regulator is trying to do :)
    • joe_the_user 6y ago
      The argument of the article is that the journalists involved further investigated the transactions and determined that a lot were shady and that the regulators were failing to do their job ... or the banks were defying the regulators when the regulators were complaining. There was no claim of "every FinCEN proves a dirty deed" - it's explicit in the article.
• raybb 6y ago
  They're also summarizing this in a podcast: https://pca.st/srocxn6v https://pca.st/srocxn6v https://open.spotify.com/show/5RMdM2ropEmNNoguvU0J27 https://open.spotify.com/show/5RMdM2ropEmNNoguvU0J27 https://podcasts.apple.com/us/podcast/suspicious-activity-inside-the-fincen-files/id1531918384 https://podcasts.apple.com/us/podcast/suspicious-activity-in... Also, to see the summary as things unfold: https://en.wikipedia.org/wiki/FinCEN_Files https://en.wikipedia.org/wiki/FinCEN_Files
• paultopia 6y ago
  U.S. monitoring of the global flow of money is frankly terrifying. U.S. law enforcement is currently politicized to an extreme degree, and the extent to which the U.S. continues in the near future to be a democracy under something vaguely like the rule of law is in severe question. One of the scariest things to think about in contemplating the possibility of having to flee this country in some point in the next few years if it goes full authoritarian is being instantly impoverished to the point of not even being able to buy gas to get to the Canadian border on the flip of a switch of some faceless bureaucrat. (And no, I don't think cryptocurrencies are the answer---wildly fluctuating value and seemingly endless security problems hardly create a sense of safety.)
  • jerry1979 6y ago
    Crypto may not be the answer, but some a couple thousand in precious metals, diamonds, and crypto could find a nice home in your bugout bag.
    • woah 6y ago
      Why not moisannite?
      • dfischer 6y ago
        Why that?
    • humaniania 6y ago
      What situation are you imagining where any of those things would have practical use?
      • acjohnson55 6y ago
        I'm imagining it being pretty easy to track down the dude who keeps buying things with diamonds.
      • jerry1979 6y ago
• kontxt 6y ago
  Also related: North Korea launders money through US banks to avoid sanctions. https://www.kontxt.io/document/d/XtRtcaydYdST5KStBdEU2bYn1sX68rkoYDXlBL78iBL2b/summary https://www.kontxt.io/document/d/XtRtcaydYdST5KStBdEU2bYn1sX...
• microcolonel 6y ago
  As a person who has to file with FinCEN most years, I beg you all not to jump to the conclusion that you should make foreign bank accounts more onerous than they already are. I think the reporting is about as good as you could hope. My U.S. bank accounts don't oblige me to report to the Canadian government, it is already quite a bit file with FinCEN, I have to get all of my momentary balances and the corresponding exchange rates and tell them the peak. If you are interested in catching these things more often, it is likely possible to do so with the existing records and reporting requirements.
• chiefalchemist 6y ago
  This article in The Atlantic from early 2013 was insightful (and freightening). Its headline is slightly misleading as the loop holes and concepts in the US system are not limited to Russians. "Russian-Style Kleptocracy Is Infiltrating America" https://www.theatlantic.com/magazine/archive/2019/03/how-kleptocracy-came-to-america/580471/ https://www.theatlantic.com/magazine/archive/2019/03/how-kle...
• User23 6y ago
  Fining a bank a tiny percentage of their take from criminal activity is completely pointless. In fact it's arguably an example of regulatory capture. Serious enforcement of laws means putting lawbreakers in prison, like we did with the S&L scandal back in the '80s. Bill Black[1] was a hero. [1] https://en.wikipedia.org/wiki/William_K._Black https://en.wikipedia.org/wiki/William_K._Black
• joshfraser 6y ago
  All money is dirty. Most people don't question the provenance of their money, but every bill in your wallet contains trace amounts of cocaine. Every dollar you have has been involved in some sort of grey or black market transaction. Your money has also been used to fund an enormous amount of legally sanctioned atrocities around the world. You're not a bad person for accepting it. The money itself is amoral. When people talk about cracking down on "tainted dollars", they're really talking about power. In 1970, Richard Nixon signed the Bank Secrecy Act and turned money into a system of control, the system of control that attempts to use money as a political tool in order to control who is able to send and receive it, who they are able to send money to, and to have complete surveillance of all financial transactions. Your money isn't really yours if an authoritarian leader can dictate how you can spend it or seize it at any time. Andreas Antonopoulos is a good person to listen to on this topic. https://www.youtube.com/watch?v=FyK4P7ZdOK8 https://www.youtube.com/watch?v=FyK4P7ZdOK8
• johnymontana 6y ago
  It's worth nothing that the ICIJ uses some pretty neat tooling to analyze data like this. They've now developed their own platform called Datashare[0] for analyzing documents that includes functionality like entity extraction via NLP. They also make heavy use of the Neo4j graph database and graph visualization tools since data like this is highly connected.[1] Since this data was released publicly you can explore it via Neo4j here: https://github.com/jexp/fincen https://github.com/jexp/fincen [0]: https://datashare.icij.org/ https://datashare.icij.org/ [1]: https://www.icij.org/investigations/fincen-files/mining-sars-data/ https://www.icij.org/investigations/fincen-files/mining-sars...
• einarfd 6y ago
  At least they've caught the leaker, https://en.wikipedia.org/wiki/Natalie_Edwards https://en.wikipedia.org/wiki/Natalie_Edwards, and is in the process of punishing her. So even if curtailing dirty money in our financial system does not seem to be on the agenda. They are doing something about reporting about it.
• tmaly 6y ago
  "Suspicious" is the keyword here. They are being filed on some predefined set of patterns. In some cases, a crime is being committed, but in others its just false positives. There are probably more false positive than anything. As long as banks are filing SARS and crossing their i's and dotting their t's they are following the laws and regulations.
• peter_d_sherman 6y ago
  >"For some financial institutions, the problem client is another bank." The entire global financial system -- exists outside of the jurisdiction of one central government or investigative authority. Opinion (and this is only one man's opinion): I believe the entire global financial system must (in the future or far future) become transparent from top to bottom -- with the ability for any citizen of the world to observe any transaction made by any fellow citizen the world in realtime. The world will not change (and everything in this article will just recur again and again, but with different actors) unless this happens. Yes, I realize that this is a minority opinion. Yes, I realize that 99% of people living on the earth at this point in time would disagree with me. Yes, I realize there would be huge technical challenges and obstacles with implementing this. Yes, I realize that it could not be done overnight, that it might take many years or even a lifetime, for various reasons. And yes, I realize I will probably be attacked by many for this opinion. But nonetheless, that's my opinion. History will always repeat itself unless we learn from it. These problems will recur again and again in the future -- just with different actors and different banks... These problems have recurred historically -- just with different actors and different banks...