1 October 2020 | Daily Maverick | Mamello Mosiana and Michael Marchant |
Banks are an essential cog in a global money-laundering architecture that enables the corrupt and criminal to disguise and hide the proceeds of their crimes.
New revelations from the US reveal the depths of the problem of banks laundering money and the urgent need for accountability. They also remind us of the urgency of holding to account the global and local banks that enabled State Capture in South Africa.
Last week the International Consortium of Investigative Journalists (ICIJ) and Buzzfeed released a trove of documents showing how for nearly two decades the biggest global banks, JPMorgan Chase, HSBC, Deutsche Bank, Bank of New York Mellon and Standard Chartered, laundered money for organised crime groups and kleptocrats across the world. The documents consist of 2,100 “suspicious activity reports” filed by these banks with the US Treasury’s Financial Crimes Enforcement Network (FinCEN).
The FinCEN files reveal how these banks approved more than $2-trillion worth of transactions from 2000-2017, which their employees flagged as being potentially criminal in nature. The banks fulfilled the bare minimum reporting required by law, but did nothing more to stop or curb the flow of illicit cash from kleptocrats such as Isabel dos Santos and the cryptocurrency scam artist Ruja Ignatova.
If FinCEN did not follow up, the banks were happy to continue to profit from the transactions. For example, JP Morgan facilitated a $1-billion transaction for a company through a London account without even finding out who owned the company. It later turned out the probable owner was a mob boss on the FBI’s “most wanted” list.