In a complaint filed Monday morning, the New York State Department of Financial Services has accused Standard Chartered Bank, one of Britain’s largest financial institutions, of “egregioius violations of law” surrounding that bank’s near-decade-long system of laundering money for Iran, including the Iranian central bank and at least two Iranian government-owned banks:
For almost ten years, SCB schemed with the Government of Iran and hid from regulators roughly 60,000 secret transactions, involving at least $250 billion, and reaping SCB hundreds of millions of dollars in fees. SCB’s actions left the U.S. financial system vulnerable to terrorists, weapons dealers, drug kingpins and corrupt regimes, and deprived law enforcement investigators of crucial information used to track all manner of criminal activity.
The complaint itself is a remarkable read describing an ongoing criminal (at least based on US law) enterprise and concludes that “SCB has committed regulatory transgressions of the highest order,” follwed by specific charges of seven individual violations of law.
A little more on the substance of the charges:
From January 2001 through 2007, SCB conspired with its Iranian Clients to route
nearly 60,000 different U.S. dollar payments through SCB’s New York branch after first
stripping information from wire transfer messages used to identify sanctioned countries,
individuals and entities (“wire stripping”).
Indeed, instructions for how to strip wire instructions of information which would indentify them in the US as relating to Iranian clients were included in an official bank operations manual.
According to the complaint, SCB was acting “as a rogue institution” and eventually even made their American executives nervous. A senior executive sent a “panicked note” to the head office in London questioning whether doing business with Iran was “still commensurate with the potential to cause very serious or even catastrophic reputational damage to the Group” and adding that “there is equally importantly potential of risk of subjecting management in US and London (e.g. you and I) and elsewhere to personal reputational damages and/or serious criminal liability.”
SCB’s Group Executive Director was quoted as having replied “You f—ing Americans. Who are you to tell us, the rest of the world, that we’re not going to deal with Iranians.”
It will be very interesting to see who, both in the US and the UK, ends up in prison for this. I do not know whether US law can reach across the Atlantic Ocean to bring enforceable criminal charges against a British banker or whether UK law would also find this scoundrel to be guilty of a chargeable offense.
In the meantime, the NY State regulators are demanding that the bank explain their apparently illegal behavior and “demonstrate why SCB’s license to operate in the State of New York should not be revoked.” Good luck demonstrating that to us “f—ing Americans,” you terrorist-enabling SOB. (Wouldn’t it be nice if these bankers were eventually charged with conspiracy to commit murder?)