Transactions worth over 100 billion dollars / The British bank is accused of helping to finance terrorists

2024-06-04 10:12:00, Kosova & Bota CNA

Transactions worth over 100 billion dollars / The British bank is accused of

A British bank that escaped prosecution for money laundering carried out billions of dollars in transactions for financiers of terrorist groups, according to US court documents.

Standard Chartered, one of the UK's biggest banks, avoided prosecution 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 allege that thousands of transactions worth more than $100 billion were carried out by the bank from 2008 to 2013 in violation of sanctions against Iran.

An independent expert has identified $9.6 billion in foreign currency transactions with individuals and companies designated by the US government as financiers of "terrorist groups", including Hezbollah, Hamas, Al-Qaeda and the Taliban.

In a statement, the bank said it disputed the whistleblowers' claims, saying their previous claims had been thoroughly discredited by US authorities.

Sanctions violated

Standard Chartered was publicly accused of falsifying transaction data in Swift, an international payment system used by thousands of financial institutions, to move 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 US Department of Justice decided not to prosecute the bank.

The foreign exchange transactions identified in the court files have yet to come to light and it is not said that Mr. Osborne or Lord Cameron had any knowledge of these transactions at the time.

The bank has 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 it has not accepted making transactions for "terrorist" organizations.

The transactions were hidden in confidential bank statements first handed over to US authorities in 2012 by two whistleblowers, including a former Standard Chartered executive, Julian Knight.

They allege that US government agencies made false statements to a court in order to have their request for a whistleblower reward dismissed.

US authorities involved in the bank's investigation successfully applied to dismiss their case in 2019. An FBI agent claimed in court that he did not show anything that "indicated or suggested that the bank engaged in improper transactions with US dollars " after 2007.

US authorities argued that the whistleblower's allegations "did not lead to the discovery of any new ... violations" and the court dismissed the case as "without merit".

However, independent analysis by an expert with decades of experience examining illegal banking transactions for the CIA, David Scantling, disputes this.

In a court filing last Friday, he claims the spreadsheets contain data on more than half a million separate transactions between 2008 and 2013 that were "blacked out," meaning they weren't immediately visible on the spreadsheets. but can be derived by a simple technique known to analysts in his field.

His statement says that among the records are numerous transactions by Standard Chartered Bank (SCB), "with or on behalf of Iranian banks, Iranian companies and Middle Eastern money exchanges that, according to the US government, finance foreign organizations designated terrorists".

It says SCB processed transactions for a Central Bank of Iran bank after it claimed it had suspended its Iranian operations in 2007.

This happened at the same time it was borrowing an average of $2 billion a day from the Term Auction Facility, an emergency program created by the US government to support banks during the global financial crisis of 2007-2009.

"The newly released data simply cannot be reconciled with the government's representations in court in this case that the whistleblower evidence does not contain evidence of undisclosed sanctions violations," Scantling's statement said.

The transactions include those of a Pakistani fertilizer company, Fatima Fertiliser, known for selling explosives that were used by the Taliban in roadside bombs that killed or maimed thousands of UK and US military personnel in Afghanistan.

SCB, the shirt sponsor for Liverpool FC, also carried out 73 transactions for a first Gambian company owned by a key Hezbollah financier, Mohammad Ibrahim Bazzi, the documents allege.

Daniel Alter, former general counsel at New York's Department of Financial Services, which originally prosecuted SCB for violating sanctions, called the new revelations "shocking" and "exponentially worse" than the bank admitted in 2012.

SCB, which is headquartered in London, primarily serves clients in Africa, the Middle East and Asia.

When Mr Osborne secretly intervened on behalf of the bank, it was at risk of prosecution for money laundering by the US Department of Justice.

On September 10, 2012, Mr. Osborne wrote to Ben Bernanke, then chairman of the US Federal Reserve, and then US President Barack Obama's Treasury Secretary, Tim Geithner. He met them the following month.

Two months later, the bank was fined $300 million but escaped prosecution with a deferred prosecution agreement (DPA), a form of probation for corporations. No individual bank executives were prosecuted.

In the same month, Mr Knight turned to US authorities with evidence that the bank's misconduct was far worse than he had admitted and continued after 2007.

In 2019, SCB agreed to a further DPA relating to transactions between 2007 and 2011 and was fined another $1.1 billion.

SCB said it was confident the courts would reject these claims. He said US authorities had previously concluded that the whistleblowers' claims were "baseless" and "did not indicate any violation of US sanctions".

But the whistleblowers claim that US authorities have committed "a colossal fraud on this court by falsely denying" that the whistleblowers have provided "previously unknown, damning evidence"./ CNA