- Author, Andy Truth
- Role, Economic correspondent
A British bank that escaped prosecution for money laundering carried out multibillion-dollar transactions on behalf of funders of terrorist groups, according to U.S. court documents.
Standard Chartered, one of the UK’s largest banks, avoided legal action by the US Department of Justice after Lord Cameron’s government intervened on its behalf in 2012.
New documents filed in a New York court claim that thousands of transactions worth more than $100 billion were made by the bank between 2008 and 2013, in violation of sanctions against Iran.
An independent expert has identified $9.6 billion in foreign exchange transactions with individuals and companies designated by the U.S. government as financing “terrorist groups,” including Hezbollah, Hamas, Al-Qaeda and the Taliban.
In a statement, the bank said it disputed the whistleblowers’ claims, saying their previous allegations had been “completely discredited” by US authorities.
Sanctions violated
Standard Chartered has been publicly accused of falsifying transaction data on Swift – an international payment system used by thousands of financial institutions – to transfer billions of dollars through its New York branch on behalf of sanctioned entities such as the Central Bank of Iran.
But in September 2012, George Osborne, then chancellor in Lord Cameron’s government, secretly intervened on behalf of the bank.
Three months later, the U.S. Department of Justice decided not to prosecute the bank.
The foreign exchange transactions identified in the court documents had not previously been revealed and it is not suggested that Mr Osborne or Lord Cameron had knowledge of these transactions at the time.
The bank twice admitted to violating sanctions against Iran and other countries – first in 2012 and then in 2019 – paying fines totaling more than $1.7 billion. But he did not admit to carrying out transactions on behalf of “terrorist” organizations.
The transactions were hidden in confidential banking spreadsheets first handed over to US authorities in 2012 by two whistleblowers, including a former Standard Chartered executive, Julian Knight.
They claim that U.S. government agencies made false statements in court in order to have their whistleblower reward request rejected.
US authorities involved in the bank’s investigation successfully sought dismissal of their case in 2019. An FBI agent claimed in court that it showed nothing that “indicated or suggested that the bank had engaged in inappropriate transactions in US dollars” after 2007.
U.S. authorities argued that the whistleblower’s allegations “did not lead to the discovery of new violations” and the court dismissed the case as “meritless.”
However, independent analysis by an expert with decades of experience examining illicit banking transactions on behalf of the CIA, David Scantling, contradicts this claim.
In a court filing last Friday, he says the spreadsheets contain records of more than half a million separate transactions between 2008 and 2013 that were “masked,” meaning they weren’t not immediately visible in spreadsheets but could be extracted using a simple technique. -known to analysts in his field.
Its statement said that among the documents were numerous transactions by Standard Chartered Bank (SCB), “with or on behalf of Iranian banks, Iranian companies and Middle Eastern stock exchanges which, according to (the US government), finance designated foreign terrorist organizations.” .
It claims that SCB processed transactions for a front bank for the Central Bank of Iran after claiming to have stopped its operations in Iran in 2007.
This happened just as the country was borrowing an average of $2 billion a day from the Term Auction Facility, an emergency program set up by the US government to support banks during the 2007 global financial crisis. 2009.
“The newly mined data simply cannot be reconciled with the government’s statements to the court in this case that (the whistleblowers’ evidence) contains no evidence of undisclosed sanctions violations,” Scantling’s statement said. .
The transactions include those of a Pakistani fertilizer company, Fatima Fertiliser, known for selling explosive materials used by the Taliban in roadside bombs that have killed or maimed thousands of British and American troops in Afghanistan.
SCB, the Liverpool FC shirt sponsor, also facilitated 73 transactions for a Gambian front company owned by a key Hezbollah financier, Mohammad Ibrahim Bazzi, according to the documents.
Image source, Getty Images
Daniel Alter, former general counsel for the New York Department of Financial Services who first sued SCB for sanctions violations, called the new revelations “shocking” and “exponentially worse” than the bank had admitted in 2012.
“It shows a frightening connection not only to commercial entities, but also to terrorist organizations, terrorist front companies for organizations like Hamas, Hezbollah, Al-Qaeda, the Taliban – things that constitute the nightmare of a regulator – and we didn’t know it: it was never disclosed to us. And that didn’t show up in the data we had,” Alter told the BBC. “That’s a whole different story.”
SCB, headquartered in London, primarily serves clients in Africa, the Middle East and Asia.
When Mr. Osborne secretly intervened on behalf of the bank, it faced criminal prosecution for money laundering by the U.S. Department of Justice.
On September 10, 2012, Mr. Osborne wrote to Ben Bernanke, then chairman of the US central bank, the Federal Reserve, as well as to Tim Geithner, then US President Barack Obama’s Treasury Secretary. He met them the following month.
Two months later, the bank was fined $300 million, but escaped prosecution thanks to a deferred prosecution agreement (DPA), a form of probation for businesses. No bank executive has been prosecuted.
That same month, Mr Knight contacted US authorities with evidence that the bank’s misconduct was far worse than it had admitted and had continued after 2007.
In 2019, SCB entered into a new DPA relating to transactions made between 2007 and 2011 and was fined an additional $1.1 billion.
“Without merit”
The FBI and the U.S. Department of Justice declined to comment. Neither Lord Cameron nor Mr Osborne have commented on the matter.
SCB said it is “confident that the courts will reject these claims.” He said U.S. authorities had previously concluded that the whistleblowers’ allegations were “baseless” and “do not demonstrate any violation of U.S. sanctions.”
But the whistleblowers say U.S. authorities have perpetrated “a colossal fraud on this court by falsely denying” that the whistleblowers provided “previously unknown damning evidence.”
News Source : www.bbc.com
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