Leaked documents reveal $2tn of possibly corrupt US financial activity

Thousands of documents, which have been disclosed to an international group of investigative journalists, detail $2 trillion (£1.55tn) of potentially corrupt transactions that were washed through the US financial system.

The documents were originally leaked to BuzzFeed News, which later shared them with the International Consortium of Investigative Journalists (ICIJ).

There are over 2,000 suspicious activity reports (SARs) filed with the US government’s Financial Crimes Enforcement Network (FinCEN), the documents show.

SARs are filed by banks and other financial institutions when they believe a client is misusing their services to carry out potential criminal activity. Nevertheless, the filing of an SAR does not mean that the bank should stop doing business with the client in question.

Major banks appear to have provided financial services to high-risk individuals from around the globe and in some cases this happened even after they had been placed under US sanctions, according to the documents.

The documents, which relate to over $2tn of transactions dating from between 1999 and 2017, show that one of the people named in the SARs is political strategist Paul Manafort, who led Republican President Donald Trump’s 2016 presidential election campaign for several months.

Manafort had to resign after his consultancy work for former Ukrainian president Viktor Yanukovych was exposed. He was convicted by a jury in August 2018 of five counts of tax fraud, two counts of bank fraud and one count of failing to disclose foreign bank accounts.

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Banks started to flag activity linked to Manafort as suspicious beginning in 2012, according to the ICIJ. In 2017, JP Morgan Chase filed a report on wire transfers worth more than $300m involving shell companies in Cyprus that had carried out business with Manafort.

In another report, there were details pertaining to over $1bn in wire transfers by JP Morgan Chase that the bank later came to suspect were linked to Semion Mogilevich, an alleged Russian organized crime boss who the FBI has on its top 10 most wanted list.

“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,” a JP Morgan Chase spokesperson told the BBC.

Meanwhile, the British bank HSBC allowed a group of criminals to move millions of dollars from a Ponzi scheme through its accounts, despite the fact that it had identified their fraud, according to BBC Panorama.

In a statement, HSBC said, “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.”

Earlier this month, FinCEN, in a statement, condemned the revelation of the documents, saying 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 unauthorized 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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