France, September 21 -- New revelations, published on Sunday by several media, have shed light on the extent to which the largest banks have been more or less involuntary accomplices in money laundering on a global scale.

It's the dirty laundry rack of money laundering. Five of the world's largest banks validated more than $2 trillion in suspicious transactions between 1999 and 2017, a survey by the Buzzfeed site in partnership with the International Consortium of Investigative Journalists (ICIJ), published on Sunday 20 September.

We find the names of notorious criminals, such as Semion Mogilevich, the "Don" of the Russian mafia, or high-flying financial scammers, such as Jho Low, the Malaysian fugitive and mastermind of the planetary fraud 1MDB, associated to those of leading financial institutions such as JP Morgan Chase , Deutsche Bank , Standard Chartered, Bank of New York Mellon or HSBC .

2,100 "suspicious activity reports"

"This case confirms many of the suspicions we may have had about the role of the big banks in money laundering and adds a wealth of shocking details," says Markus Meinzer, expert in international tax evasion networks for the NGO. Tax Justice Network, contacted by France 24.

These revelations demonstrate, for example, how the HSBC bank continued to accept questionable transfers linked to Russian nationals suspected of corruption, even though it had just been fined in 2012 for having laundered hundreds of millions of dollars in money from South American drug cartels.

The investigation also suggests that the bank JP Morgan Chase did not learn from its mistakes in the early 2000s with the scam financier Bernie Madoff, since it does not appear to have subsequently undertaken more in-depth research on certain of these most shady customers. It thus validated, between 2010 and 2015, more than a billion dollars of transactions of a small Cypriot structure, ABSI, which was used, in reality, to launder part of the loot of the Russian mafioso Semion Mogilevich, one of the FBI 's 10 most wanted people.

All of this information comes from more than 2,100 "suspicious activity reports" (SARs) obtained by the Buzzfeed site. These are alerts issued by internal bank controllers about accounts or transactions that could be used to launder money. Financial institutions are then required to transmit these documents to the FinCEN (Financial Crime Enforcement Network), the American authority for the fight against white-collar crime. Hence the name of this new affair: the “ FinCEN files”.

Boots, lingerie and suspicions

Beyond the inventory à la Prevert of the shortcomings of HSBC , Deutsche Bank or JP Morgan in the fight against money laundering, this case reveals above all "the limits of the 'SAR' system", judge Markus Meinzer. Banks, once the document has been transmitted to FinCEN , are not obliged to prohibit the transaction. "They use these suspicious activity reports to wash their hands of the consequences of the transactions they authorize despite everything", regrets this specialist in international tax evasion. In more than 50% of the cases, the banks did not block these dubious transactions, found Buzzfeed.

Some of these validated transactions, however, had all the trappings of an overt money laundering effort. This is particularly the case of NoviRex, a strange company of small appliances opened in 2010 in London. She quickly began to pay bills of several hundred thousand dollars to various companies located in tax havens for alleged purchases having very little to do with her core business: 200,000 dollars in lingerie, or 400,000 dollars for women's boots.

However, JP Morgan accepted NoviRex as a client. “If I were JP Morgan and they showed me the accounts of this company, I would immediately find that horribly suspicious,” said Martin Woods, a former British police detective specializing in financial crimes, interviewed by the International Consortium of investigative journalists . NoviRex has, in fact, turned out to be too sleazy to be honest: American justice discovered in 2017 that this company was used by the entourage of the former Ukrainian president Viktor Yanukovych to launder money from the corruption.

Uber of whitening

These big banks prefer to close their eyes because it pays off enormously. To understand their financial interest in this affair, we must return to their role in the international financial circuit. "They are the only ones able to validate international funds transfers in dollars, which is vital for those who want to launder money", explains Markus Meinzer.

Initially, when a criminal wants to put his dirty money away, he deposits it in a small local bank that is not too careful about the origin of the funds. But then he wants his jackpot to be really safe in one or more off-shore accounts. To do this, you have to go through a larger bank that has access to the American financial market, through which almost all international capital flows pass.

HSBC , Deutsche Bank and a few others hold this precious sesame, and these banks will therefore charge juicy commissions to validate these transactions in dollars. They therefore serve as intermediaries, a bit like “laundering Ubers”. They are the ones who transport the money to its final destination. They do not necessarily know that it is dirty, but do not make much effort to be interested in its origin, has demonstrated this new scandal.

The money that these banks make thanks to these dubious movements of funds is well worth the risk of being pinched sometimes by the financial authorities. Thus, in 2014, when JP Morgan had to settle 2.6 billion dollars to settle its role in the Madoff affair, it also recorded nearly 22 billion dollars in profits, including a large part in commissions on international transfers. , underlines the ICIJ.

These new revelations "prove once again that the financial sanctions do not discourage these banks from being passive accomplices of this transnational crime", affirms Markus Meinzer.

For him, this would be the perfect opportunity to increase the pressure on these major international banks. "In addition to suspicious activity reports, these institutions should be required to communicate to the authorities the precise identity of the customers concerned by these operations," he said. Too often in the 'SAR' consulted Buzzfeed, the bank claims not to have been able to identify the true beneficiary of the transactions. Such an obligation would perhaps encourage them to carry out more in-depth investigations into the origin of the funds.

It would be more difficult for them to practice the policy of the ostrich and say that they did not know. It would also be necessary, according to Markus Meinzer, to condemn the bankers to terms of imprisonment "to make pass a clear message". Because after all, he recalls, the current lightness of banking controls on these illicit flows allows mafiosi to finance activities that can kill or corrupt politicians to ruin countries.

Published by HT Digital Content Services with permission from France 24 (French). Published by HT Digital Content Services with permission from Alwihda info. For any queries regarding this article or any other content requirements, please contact Editor-in-Chief at [email protected]