The FinCEN Files: How Banks Move Trillions of Dollars for Organized Crime and Shady Characters

n this May 11, 2012 file photo, people stand in the lobby of JPMorgan Chase headquarters in New York.
( AP Photo/Mark Lennihan )

Tanzina Vega: I'm Tanzina Vega, and this is The Takeaway. There're banks that most Americans do business with for everything from savings account to mortgages. Many like JPMorgan Chase, HSBC, and Deutsche Bank are household names, but a new investigation from BuzzFeed News and the International Consortium of Investigative Journalists, alleges that many of these same banks have a shadow financial system where the money used to fund illegal activity from organized crime groups to terrorist organizations has been allowed to flourish.

The investigation alleges that many of these banks, as well as the United States government, have done little to nothing to stop these transactions. While many Americans may feel removed from issues involving big banks and so-called dirty money, our next guest says that what these banks do could have implications on our everyday lives. Anthony Cormier is a senior investigative reporter with BuzzFeed News, and he joins me now. Anthony, thank you for being with me.

Anthony Cormier: Well, thanks for having me.

Tanzina: Bank employees are supposed to look for suspicious activity, and in almost all of these cases, they did their jobs. They filed suspicious activity reports. Where did those reports go, and what happened?

Anthony: Right. Every bank that transacts in US dollars, when they note suspicious behavior, they're supposed to send it to a department inside The Treasury called the Financial Crimes Enforcement Network. Those folks are the ones that keep this vast database of all of these reports from around the globe of transactions that bear the hallmarks of money laundering or other kinds of financial crime.

Tanzina: Is this a question of folks who were doing their jobs, reporting suspicious activity, and then, maybe folks who were higher up the managerial chain inside of these banks ignoring that suspicious activity, or did the Financial Crimes Enforcement Network ignore that? What did your investigation find?

Anthony: I think you've got both issues here. You've got these folks who are filing the reports as they should, and what we don't see is the banks cutting off those suspicious clients. For instance, I'll use Paul Manafort, JPMorgan Chase allowed Paul Manafort to send or receive millions of dollars and flagged his accounts at least eight times. We see this again and again.

We saw HSPC Hong Kong with clients who they deemed suspicious 12 times or 8 times, so we know that the compliance officials are flagging them, but the bank executives are not cutting off the accounts. On the flip side, from the government's view, they're sitting on all of these records and they don't have enough staff to, frankly, read them all. What our investigation found is they're not taking action when they read these reports, when they get these issues.

Tanzina: Now, what's behind that? I mean, if they know that this is an issue that's happening, it's clearly not supposed to happen. Why aren't they taking action?

Anthony: Well, it's a really complicated issue. I think the justice department says that their best course of action is this deal with the corporate entities' banks called the deferred prosecution agreement. They feel that they can best get these banks or corporate actors in line by forcing them to change their ways. They don't prosecute the executives. They don't take individuals or hold the individuals accountable. They're forcing them to pay fines and to clean up their compliance departments.

Tanzina: Anthony, we're talking about your investigation found about $2 trillion, that's trillion with a T, $2 trillion that have circulated through these banks both globally and domestically, right?

Anthony: Correct, yes. That's, to be fair, a small window into a much larger system. Now, very few SARs, or suspicious activity reports, have ever been made public before. We have about 2,100, but consider that last year, FinCEN received 2 million of these reports. So far, 2,100 flagged $2 trillion. Imagine the figure on 2 million of these reports a year.

Tanzina: Of course, those reports were leaked to you, correct?

Anthony: They were disclosed to BuzzFeed News.

Tanzina: Got it. Anthony, this is something when a lot of Americans here with $2 trillion circulating around the globe with all unsavory characters and big banks, they feel like most of us, like, "Well, what does that have to do with me?" Your reporting shows that it does have real-life consequences for everyday folk who have regular accounts and regular lives. What effect-- How do you make that connection between what's happening in this big, dark money world, and what's happening with the average everyday Americans?

Anthony: Absolutely. We reckoned with this throughout the course of the reporting. Money laundering is a crime that makes other crimes possible. It accelerates economic inequality, drains public funds, it undermines democracy, it destabilizes nations. The banks are playing a huge role in this, and what we found is that these transactions are showing up in the world that we all live in. We found suspicious payments flowing into international sports and Hollywood entertainment, luxury real estate, sushi restaurants, the gas that you put in your car, even the granola that you might put in your cereal, or your yogurt.

Tanzina: Anthony, the big question now is what happens next? Have politicians responded? Has FinCEN responded to this?

Anthony: Well, FinCEN issued a rather unusual statement a couple of weeks before we published. When we first approached them with our questions, they said they were going to refer the matter to the justice department. The banks have not been able to comment to us on these reports. They're saying, in large part, that they can't comment on these types of reports. The market has responded. We've heard, this week, politicians respond as well. I thought Senator Liz Warren put out a very powerful statement suggesting that the system needs reform or overhaul. We'll see where that goes, and we're going to keep reporting until the end, frankly.

Tanzina: You said the banks have not responded, have they said anything about what's happened so far?

Anthony: Yes, quite a lot. I mean, I think they've said that they're either acting in good faith and that they are trying to stem the tide of suspicious activity. In fairness to the banks, it's important to note that the criminals act very quickly, are very agile, and the schemes that they're using to filter the money into the banks are rapidly changing. On a day to day basis, these banks are facing an enormous task. They've got to be smarter than the criminals. They've got to know what the latest scheme is. I think it's important to note that they're trying to pivot all of the time to catch up with the criminal networks.

Tanzina: Oh, we'll be watching. Anthony Cormier is a senior investigative reporter with BuzzFeed News, and you can read the full investigation on Anthony, thanks so much for joining us.

Anthony: Thanks for having me.


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