scorecardWhat are the FinCEN files? Here's what to know about the leaked documents tying Wall Street banks to possible money laundering.
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What are the FinCEN files? Here's what to know about the leaked documents tying Wall Street banks to possible money laundering.

Graham Rapier   

What are the FinCEN files? Here's what to know about the leaked documents tying Wall Street banks to possible money laundering.
Finance4 min read
  • BuzzFeed News and dozens of other newsrooms have published a massive trove of documents known as the "FinCEN Files," named after the US Treasury Department's Financial Crimes Enforcement Network headquartered in Washington D.C.
  • The data dump contains thousands of "suspicious activity reports," or SARs, that banks file to FinCEN when they suspect potentially criminal activity.
  • However, the files reportedly show that these largely go unheeded by law enforcement or the banks themselves.
  • In total, the transactions in question top $2 trillion and span the globe from Interpol-wanted Kazakh politicians to Kremlin- and Iran-linked families, according to the reports.

A large group of major banks allegedly moved trillions of dollars in potentially illicit cash for suspected criminals around the world, according to a trove of documents obtained and published by BuzzFeed News along with a consortium of international journalists.

The leaked documents, commonly referred to as the FinCEN files, are named after the US Treasury Department's Financial Crimes Enforcement Network. Headquartered in Washington D.C., FinCEN is a 300-person intelligence unit with which financial institutions file "suspicious activity reports," or SARs, which are internal reports flagging concerning or potentially illegal behavior.

SARs are filed by some 14,000 banks and other institutions and allow law enforcement agencies at all levels to communicate in order "to locate accounts and transactions of persons that may be involved in terrorism or money laundering," the agency says.

FinCEN's budget of $115 million is relatively small compared to other Treasury subsidiaries, like the Internal Revenue Service or US Mint.

The recently released FinCEN files span from 1999 to 2017 and consist largely of SARs, which are normally confidential. In total, the transactions in question top $2 trillion, according to the reports.

Accompanying the raw SAR files — which total more than 2,100 — are thousands more pieces of information, including on-the-record interviews with insiders and experts, court files, data obtained by Freedom of Information requests, and more, the journalists report. All together, "the documents provide an unprecedented glimpse into global money laundering," BuzzFeed News said.

While the SARs themselves are not indicative of any illegal activity — if anything, they show compliance processes in place — other documents in the trove reportedly show instances where banks continued to work with suspected criminals even after knowing about the potential crimes. In many cases, banks also did not know the true owner of an account registered to companies in offshore havens like the British Virgin Islands, the journalists said.

"By utterly failing to prevent large-scale corrupt transactions, financial institutions have abandoned their roles as front-line defenses against money laundering," Paul Pelletier, a former senior financial crimes prosecutor, told ICIJ as part of its reporting.

To be sure, it's up to the government to actually bring charges when it receives a credible or actionable SAR. But with more than 2 million of them filed last year alone, according to Buzzfeed News' reporting, paying close attention is virtually impossible. To add to the Treasury's difficult task, FinCEN's total staff headcount has shrunk more than 10% in recent years.

Which banks are mentioned in the documents?

Deutsche Bank, Bank of New York Mellon, Sandard Chartered, JPMorgan, and Barclays are the five main institutions in the reporting so far. In total, "nearly 90" institutions were mentioned in the documents, according to BuzzFeed News.

Each bank released a statement defending itself, all of which can be read here. No firm commented on specific instances alleged by the documents.

Deutsche Bank said, for example, that it's "worked and still works constructively together with the authorities. We have invested almost $1 billion in improved controls, trainings and operational processes, and have increased our anti-financial crime team to over 1,500 people. We plan to continue to increase this number further. We are a different bank now."

What shadowy figures or other activities are in the documents?

The files reportedly show London-based HSBC allowed alleged fraudsters involved with WCM777, an $80 million Ponzi scheme, to move money around the world.

In 2012, after a US Senate investigation, the bank was fined a record $1.9 billion for its role in channeling cash for what the investigators called "drug kingpins and rogue nations," the BBC reported at the time. Yet the very next year, documents reportedly show, WCM777-affiliated actors were able to move $15 million through the bank.

Banks also reportedly processed millions for a family members of a Kazakh politician wanted by Interpol. Even after a red notice was issues for Viktor Khrapunov, a former mayor of Almaty, Kazakhstan, JPMorgan still handled transactions for the accused criminals, according to BuzzFeed News.

The documents also reportedly show instances involving associates of Russian President Vladimir Putin, Iranian state money despite international sanctions, and more.

You can read 11 of the most high-profile exposed incidents here.

What has the fallout been so far?

After BuzzFeed approached the Treasury for comment, the agency said "the unauthorized disclosure of SARs is a crime that can impact the national security of the United States, compromise law enforcement investigations, and threaten the safety and security of the institutions and individuals who file such reports."

It also referred all further matters to the Department of Justice, which said it "remains committed to aggressively investigating and prosecuting financial crime — including money laundering — wherever we find it."

Yet the department has been hard at work prosecuting those responsible for divulging the SARs and other documents. In January, Natalie Mayflower Sours Edwards, a former senior adviser at FinCEN, pleaded guilty for conspiring to send sensitive government information to a reporter. (Neither BuzzFeed nor the ICIJ has explicitly commented on the identity of their source or sources).

FinCEN specifically did not grant BuzzFeed's request for interviews about its internal processes, the site said.

Bank stocks, especially of those mentioned heavily in the document dump, slumped drastically on Monday. HSBC in particular saw its shares dip to their lowest levels in decades, while Deutsche Bank fell 8.6% and JPMorgan dipped about 3.5%.

Several US lawmakers, including democratic senators Bernie Sanders and Elizabeth Warren, called for more banking reforms in light of the revelations, according to BuzzFeed.

"We must root out this corruption by strengthening transparency of financial networks and clamp down on the dark money that flows through the global financial system," Warren said, while calling for her colleagues to pass her "ending too big to jail act" which calls for criminal charges against Wall Street executives stemming from the last financial crisis.