FinCEN Files Leak - Experts Comment

  • AML and KYC
  • 22.09.2020 10:21 am

Leaked documents involving about $2tn of transactions have revealed that some of the world's biggest banks were a part of an industrial-scale money laundering. 

Here are some of the cases:

  • HSBC allowed fraudsters to move millions of dollars of stolen money around the world, even after it learned from US investigators the scheme was a scam.
  • JP Morgan allowed a company to move more than $1bn through a London account without knowing who owned it. The bank later discovered the company might be owned by a mobster on the FBI's 10 Most Wanted list.
  • Evidence that one of Russian President Vladimir Putin's closest associates used Barclays bank in London to avoid sanctions which were meant to stop him using financial services in the West. Some of the cash was used to buy works of art.
  • The husband of a woman who has donated £1.7m to the UK's governing Conservative Party's was secretly funded by a Russian oligarch with close ties to President Putin.
  • The UK is called a "higher risk jurisdiction" and compared to Cyprus, by the intelligence division of FinCEN. That's because of the number of UK registered companies that appear in the SARs. Over 3,000 UK companies are named in the FinCEN files - more than any other country.
  • The United Arab Emirates' central bank failed to act on warnings about a local firm which was helping Iran evade sanctions.
  • Deutsche Bank moved money launderers' dirty money for organised crime, terrorists and drug traffickers. More details (BuzzFeed News)
  • Standard Chartered moved cash for Arab Bank for more than a decade after clients' accounts at the Jordanian bank had been used in funding terrorism.


John Dobson, CEO at anti-money laundering experts SmartSearch, calls the revelations contained in the FinCEN files of criminal cash being moved around the world’s biggest financial institutions, a betrayal of all those working hard in the global fight against financial fraud. He said: 

“This is nothing short of a betrayal for all those thousands of businesses doing their bit in the global fight against money laundering and financial fraud.

We speak to customers in the UK and the US day-in, day-out, who are all working hard to make sure they have the best tools and technology available to prevent money laundering, and to be compliant with the law. While at the same time, if these documents can be believed, one of the world’s biggest banks has effectively turned a blind eye and enabled criminals to take full advantage.

These revelations couldn’t have come at a worse time of course, with so many businesses reeling from the ongoing affects of the Covid 19 pandemic, and the extra security threats that has created. Events like these are hugely damaging for the banks involved but also for all the other banks who are trying to stamp out money laundering, and it cannot go unpunished.

Over the years SmartSearch has developed more and more enhanced levels of security for its customers in a bid to stay ahead of the criminals. Never for a moment did we consider we’d have to stay one step ahead of the institutions we thought we were trying to protect.”


Charles Delingpole, founder and CEO of the global regtech company ComplyAdvantageadds:

“The news from the ICIJ highlights the extent of the challenge in combating money laundering, and how much needs to be done to reduce the estimated $2 trillion that is laundered globally each year.

Recent activity suggests that regulators are serious about cracking down on the proceeds of crime, and stemming the flow of this money through financial institutions. For example, the EU introduced the Fifth Anti-Money Laundering Directive (5AMLD), which means companies risk fines of up to €5m or 10% of annual turnover, if they fail to comply. The sector will now be watching to see what action, if any, is taken following these disclosures.

Increasing numbers of companies are using financial crime detection technology to neutralise the risk of both their clients and themselves being unwittingly involved in money laundering, terrorist financing and/or corruption. Technology automates and improves many of the central and time-consuming tasks involved in identifying bad-actors, therefore substantially reducing risk.  

It's also encouraging to see the UK Government tighten the system of checks at Companies House. For too long, Britain’s register of companies has been too easily abused by money launderers and fraudsters who have used it to set up shell companies to launder their money. We hope this sets the tone for continued regulatory improvements around the world, and that the existing system is healthily scrutinised."


Jane Jee, CEO at the RegTech enterprise Kompli-Global, following the FinCEN files leak, comments:

“In the latest scandal to hit the banking sector and severely tarnish the UK’s reputation as an ethical place to do business, leaked documents, involving about $2tn of transactions, have revealed how some of the world's biggest banks have allowed criminals to move dirty money around the world. The International Consortium of Investigative Journalists (ICIJ) released files over the weekend that were mainly Suspicious Activity Reports filed with a U.S. Treasury Department agency known as the Financial Crimes Enforcement Network, or FinCEN”.

The FinCEN files reveal  that banks have severely come up short through sanctions evading, failing to carry out proper Customer Due Diligence (CDD) aka  Know Your Customer (KYC) checks, ignoring publicly available evidence of wrongdoing by clients and failing  to block accounts where there was clear  suspicious activity.  The UK is called a "higher risk jurisdiction" and compared to Cyprus, by the intelligence division of FinCEN. Over 3,000 UK companies are named in the FinCEN files - more than any other country.”

Therefore now, more than ever, it is time for a step change in how the government, industry and regulators tackle money laundering, especially as the technology is available to prevent these scandals. Regulated entities no longer have an excuse not to take effective action to comply with AML and related legislation. It’s time for the industry to step up and take charge – it’s not just their own profits and reputation they are risking, it’s the safety and stability of the communities around them as well –financial crime wrecks lives.”


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