Ripple effects from banking fiascos – 2

Those big banking disasters won’t go away. Ripple effects keep showing up, this time from breaking money laundering rules.

A number of US soldiers wounded in terrorist attacks while in Iraq have sued a number of banks for their role in facilitating the money transfers to fund the attackers.

This ties in to the money laundering fiasco of banks allowing Iranian businesses, government, and individuals to access the U.S. banking system in spite of a U.S. ban on doing so. Some of my previous posts in this tag.

The line of reasoning goes like this:  The banks engaged in a conspiracy with the Iranian government. The banks allowed banned entities to access the U.S. banking system. The Iranian government was therefore able to move over $150M to Hezbollah and other organizations. Those organizations in turn used the money to fund their teams in Iraq. Those teams attacked and wounded American soldiers. Therefore, the cited banks are liable for the battle injuries.

The banks are being sued by over 200 survivors of the attacks and families of those who perished.

Banks sued:

  • Barclays
  • HSBC
  • Standard Chartered
  • Credit Suisse
  • Royal Bank of Scotland

Seems like they would have included PNB Paribas.

The suit alleges there were scores of attacks which were funded by money obtained by the illegal wires.

U.S. law allows victims of terrorist attacks to access the U.S. legal system for redress.

I only have a businessman’s and CPA’s knowledge of the legal system. Take my observation for what little it is worth:  I suspect the soldiers will have a difficult time proving their case.

But they just might succeed. That means the five mentioned banks need to take this very seriously.

A few articles for more background:

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  1. Pingback: More good stuff on banking fiascos – 4-14 | Attestation Update - A&A for CPAs

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