Search Results for: "money laundering"

Credit Suisse under investigation. Again. For money laundering. Again.

A different type of money laundering. Image courtesy of Adobe Stock.
A different type of money laundering. Image courtesy of Adobe Stock.

Looks like Credit Suisse is in trouble again. The feds and NYDFS have opened another money laundering investigation.

Check out the report on 2/23 at Wall Street Journal – Credit Suisse Probe Opens Old Wounds for the following info.

A retired professor invested $500K in a startup back in 2000. When the company went public in 2008, his shares were worth $80M.

Cool!  Good for him!

He didn’t want to share a lot of that with Uncle Sam, so he got some help from the Israel branch of Credit Suisse to cut his tax bill.

By 2013 he had $200M parked in his accounts in Switzerland.

Well, somehow the revenuers caught up with him.

Surprise! Enforcement efforts against money laundering have unintended consequences.

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Image courtesy of

Severe fines against large banks for violating anti-money laundering rules has led the banks to place a heavy focus on making sure their customers are legit. The result is a closing accounts of customers who have too high a risk of being shady. The unintended consequence is legitimate businesses and legitimate charities have difficulty finding a place to do their banking.

In a wonderful irony, articles at The Wall Street Journal on two successive days illustrate the tension. The articles leave you wondering in opposite directions. One article makes you think the banks ought to get serious about screening clients and shut down a bunch of accounts. The other article makes you wonder why these charities doing such wonderful work are getting all their accounts closed for no good reason.

First, charities finding themselves without bank accounts.

3/30 – Wall Street Journal – Cautious Banks Hinder Charity Financing / Account shutdowns and holdups of money transfers hinder ability to deliver aid to refugees – A charity that funds a school in Turkey which provides education to around 400 refugees from Syria had their account closed by JP Morgan for no stated reason. After an inquiry from the WSJ, the bank reversed their decision.

Another charity that operates a hospital in Syria had their accounts closed by BofA. After moving to Wells Fargo, their accounts were closed there. Staff at the hospital went four months without pay while the charity tried to figure how to get money into the country.

Authors have spoken to eight other charities who have had their accounts closed. Many others have had money transfers going into Syria, Turkey, or Lebanon held up for varying lengths of time.

Article mentions that banks are under pressure from the U.S. federal government to monitor their customers accounts and close those accounts which could be related to money laundering, whether related to drug running, terrorist financing, or other illegal activity.

Barclays’ money laundering fine in relation to their 2014 financial statements.

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Image courtesy of

Previous post discussed Barclays drawing a £72M (US$109M) fine for breaking British anti-money laundering laws.  The bold scheme involved not putting clients’ names into the computer system amongst other creative plans. They bankers involved also gave their clients a money back guarantee if their names ever became public.

I did a bit of research to find out how the fine compares to their financial statements. Was wondering how big a hit $109M really is for them.

You can find the 2014 financial statements for Barclays at this link. The financials are here. Income statement is on page 224.

Here are some key numbers to help put the £72M fine in perspective:

How’s this for a brazen money laundering scheme? We can add another item to the list of at least $16 billion of fines for money laundering.

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Image courtesy of

Check out this plan for evading money laundering rules. Oh, it came with a money back guarantee to clients whose money was being laundered. Also, I’ve accumulated a preliminary list of industry-wide fines for getting caught busting those AML rules.

11/26 – CNN – Barclays fined $109 million for trying to hide “the deal of the century” – Staff at Barclays came up with a creative plan to hide clients’ money. The staff processed US$2.8B of deposits from “politically exposed people”, meaning people with significant political power and ability to do bad stuff to generate personal wealth.

Commission for the bank was £52M (US$77M).

According to the article, this scheme involved merely performing an Internet search to verify the source of funds as asserted by the clients, did not enter clients’ names on the internal computer systems which meant compliance staff would never find out who owned the money, and used quickly opened & closed offshore accounts to move the money.

Unintended consequences of anti-money laundering enforcement

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One of the general rules of life seems to be that when one person does something really bad, the larger group pays the penalty.

You remember the drill – one person in the school classroom misbehaves on the playground and the whole class looses recess.

Or one of your coworkers breaks etiquette of the office and there is a new restrictive rule that inconveniences everyone. One person pushes the boundary on expense reimbursement and everyone gets new reporting requirements.

Well, same thing is emerging with the tremendous effort against money laundering.

Check out Account Closed: How Bank ‘De-Risking’ Hurts Legitimate Customers / In their hunt for money launderers, regulators are forcing banks to shut down branches and reject business At the Wall Street Journal on August 13.

Primer on money laundering and tax havens

High level overview on the how-to of laundering money and using tax havens. Will leave you curious for more details, but it’s a good intro. Also, article on another couple of billion in another settlement from the Great Recession.

4/7/13 – ICIJ – Tax Havens 101: the high cost of going offshore – Good 4 minute primer on how to set up and run an offshore operation to hide assets, whether from the taxman, your spouse, or creditors.



For under 4 minutes, it is a good explanation.

A few places to expand the ideas:

Standard Chartered draws $300M fine for money laundering issues

As mentioned yesterday, StanChart did get a $300M fine for running afoul of their 2012 agreement. Their software to monitor wires for possible violations of money laundering laws didn’t pick up on one or several million wires that should have been flagged.

In addition to the fine, the bank agreed to permanently halt US dollar settlement for about 300 high-risk clients in Hong Kong and UAE.

Standard Chartered under review for money laundering issues. Again.

Standard Chartered is in trouble again for money laundering issues.

Either I’ve been blogging long enough to see cycles repeating or the too-big-to-fail banks are getting more casual in their casual efforts to comply with US law. Or maybe I’m just suffering from confirmation bias.

Their software that is supposed to flag suspicious transactions allegedly failed to identify a million transactions that should have been reported to US authorities for review. That is according to the monitor installed to watch their compliance.

Unknown yet how many, if any, of the million suspicious wires were actually illegal.

Settlement negotiations are underway. Discussion in the air suggests a fine of $100M is possible. The bank’s chief executive has reportedly flown to New York to participate in the negotiations.

Fine against BNP Paribas for money laundering in context of their financial statements

Previously discussed that maybe BNP Paribas got off easy for illegally laundering $190 billion.

This post will give some context to the fine.

The $8,973M fine is equal to 6,593M Euros.

For the rest of this article, all amounts are in millions of Euros.

The bulk of the evasion of sanctions ran from 2002 through 2009 but continued into 2012, well after the bank knew the investigation was underway. That is concentrated on 8 years but stretched out to about 11 years. Let’s assume the volume was actually dropping in ’11 and ’12 so it is essentially a 10 year run of money laundering.

That means the fine was paid in one year, but it is an accumulation of 10 years activity. Thus we can amortize the fine over 10 years

Fine in relation to financial statements

Let’s look at the fine in relation to the 2013 consolidated financial statements, which can be found here on this page of their website.

Balance sheet (page 126)

Total BNP Paribas fine is $8.97 billion for money laundering

I previously mentioned the total penalty BNP Paribas agreed to pay for laundering money to evade U.S. trade sanctions was $8,833.6M. The updated WSJ article said the total settlement is $8.97B. After realizing the disconnect, I went back to the federal plea deal. I missed that amount until this morning.

The forfeiture is $8,833.6M, which represents the amount the feds say on page 1 of the plea deal is …

BNP Paribas nearing settlement for $30B of money laundering. Getting a bargain at $8B penalty?

The Wall Street Journal reports BNP Near Settlement With U.S. for Up to $9 Billion.

The article says the bank and U.S. prosecutors have agreed on the broad terms of the settlement, which would include:

  • Penalty in range of $8B to $9B
  • Plead guilty to one criminal charge
  • Ban on dollar settlement, likely in range of several months
  • Firing of at least 30 employees

Watching and learning from the money laundering cases

Those of us auditors outside the huge firms may not have to deal directly with the impact of banks engaging in money laundering, yet we can still learn by watching.  Here’s the background in one sentence –  – Many of the largest banks were systematically ignoring U.S. laws against sending money into certain countries.

On my other blog, Nonprofit Update, I have several posts discussing the mess.

Of interest to me as an auditor is the apparently intentional violation of laws and how the corporate tone at the top could have prevented the fiasco.

Another major investigation of bank secrecy: Pandora Papers.

Image courtesy of Adobe Stock.

Looks like there is another flood of reporting ready to appear in print on bank secrecy and hiding wealth.

This project will be called the Pandora Papers.

If you recall, a major series of reports back in the 2016 timeframe described money laundering efforts flowing through one particular law firm in Panama. You can read my comments on the coverage.

The International Consortium of Investigative Journalists (ICIJ) brought together around 600 journalists from about 150 media outlets to analyze a data leak with 2.94 TB of info. That’s terabytes, as in thousands of gigabytes.

The ICIJ kickoff summary was published on 11/3/21: Pandora Papers: An offshore data tsunami.

If you are at all interested in offshore banking, or money laundering, or the world-far-away of hiding or relocating wealth even without nefarious intent, you will want to pay attention.

Looks like there will be a lot of coverage, what with 330 politicians and 130 people on the Forbes billionaire list showing up in the data.

From a first glance, it looks like this project have as one focus the structure of banks and professionals that service this market.

Recap of fines for major banking fiascos.

Image doing that to seventy billion dollars. Intentionally. Image courtesy of Adobe Stock.

It is so sad to say, but a reality never-the-less, there are so many major banking fiascos with such a wide range of willing participants that it is impossible to keep straight the players and disasters and fines based just on memory.

So, that means I have a spreadsheet to track the willful disasters I’ve been following.

My tally does not include all the billions of dollars paid to settle mortgage issues arising from the Great Recession. That is another massive set of disasters all by itself.

Here is my running tally of the amount of stockholder equity wasted for a range of different debacles. Amounts in millions of dollars: