The British bank has agreed to a $340 million penalty to settle allegations from New York state regulators that the bank was laundering money for their Iranian customers. The Wall Street Journal describes a settlement in their article Bank Settles Iran Money Case. This is one in a long string of settlements for money-laundering.
The accusation by the New York Department of Financial Services is that over the course of a decade the bank hid Iranian involvement for 60,000 wires totaling $250 billion. The basic concept is the wires were withdrawn after initial submission and the identifying information removed from the transaction, then the instructions were resubmitted.
I touched on this in an earlier post.
The dispute is apparently whether these were so-called ‘u-turn’ wires from someone outside the United States going to another party outside United States. For increased reliability, or speed, or trust, sending customers like to wire their money into a New York account and then have the bank wire the money out of New York to the recipient.. Apparently those types of transactions are not subject to the trade embargoes.
The amount in dispute is $250B according to the New York regulators, only $19M according to the bank, and other reports say there is actually $300M of illegal wires.
Regardless of the amount, the bank settled.
Investigations are still underway by US federal and British regulators. It appears they will eventually negotiate a settlement as well.
Lots of settlements for money laundering
A sidebar in the WSJ article caught my attention. Apparently there is a lot of money laundering going on. A lot of it has been caught, resulting in big settlements.
Here’s a list of the settlements listed in the WSJ article, along with another two potential settlements. Another Wall Street Journal article walks through Tallying Up U.S. Regulators’ Money-Laundering Fines by giving the background of these cases. I will list them chronologically. Since it is their data, I will quote it.
$567M – 12-09 – Lloyds TSB Bank
$536M – 12-09 – Credit Suisse
$500M – 5-10 – Royal Bank of Scotland
$298M – 8-10 – Barclays
$619M – 6-12 – ING Bank
$340M – 8-12 – Standard Chartered – settlement with New York regulators
$700M announced reserve for settlement – HSBC Holdings PLC
$???M – Standard Chartered will have a separate settlement with US authorities
That is a lot of cases.
Next post – what’s going on here?
Update: Standard Chartered signed a definiative consent degree with the New York regulators. See post here.