FinCEN Files, a new investigation led by the International Consortium of Investigative Journalists, reveals the role of global banks in industrial-scale money laundering.
ICIJ and 108 media partners spent 16 months investigating confidential U.S. Treasury documents shared by BuzzFeed News. Initial leads on suspicious money transfers from Nepal, Venezuela and Ghana – to name a few – meant only one thing: these documents had to be examined by journalists from those countries who could make sense of the information contained in them.
Our global network of reporters worked together to explore more than $2 trillion transactions dated from 1999 to 2017 that had been flagged in the more than 2,100 reports by nearly 90 financial institutions.
Here’s a roundup of FinCEN Files stories from ICIJ partners in Asia.
Philippines
In the Philippines, journalists working for the Philippine Center for Investigative Journalism reported that the banks’ suspicious activity reports showed “how vulnerable the Philippine financial system had been to money laundering as moving funds apparently can be done without naming or verifying the source and beneficiary as well as specifying the purpose of the transfers.”
Just a few years ago, Filipino remittance firms were investigated in the aftermath of the 2016 cyber-heist that siphoned off $81 million from Bangladesh’s central bank.
The FinCEN Files showed that those firms had a precedent. Years before “one of the biggest thefts in history,” they had moved millions of dollars in “suspicious” transactions, “raising the question as to why they were not stopped in their tracks much earlier,” the PCIJ report said.
Malaysia
In Malaysia, ICIJ’s media partner Malaysiakini found a similar case. U.S. banks didn’t act promptly on suspicious money transactions linked to financier Jho Low and possibly connected to the looting of Malaysia’s 1MDB fund until it was too late, they reported.
JPMorgan Chase, for instance, moved more than $1 billion for the fugitive financier behind the scandal, FinCEN Files show.
Taiwan
In Taiwan, CommonWealth magazine reporters found that local banks cleared transactions for a cryptocurrency firm currently sued in the U.S. for alleged market manipulation.
India
FinCEN Files also helped to reveal the details of transfers totaling $14.46 million from a Seychelles- based shell company to a subsidiary of the Adani conglomerate, one of India’s most powerful, and of a $3 million fraud case involving Indian Premier League, a professional cricket league in India, the Indian Express reported.
Banks in India, Singapore and New York also moved money for Altaf Khanani, a Pakistani money launderer, who is also said to have been a key financier for fugitive terrorist Dawood Ibrahim, according to the Indian Express.
Khanani and his organization reportedly moved an estimated $14 billion to $16 billion annually for drug cartels and terrorist organizations like al-Qaida, Hezbollah and the Taliban.
The new records expose the extent of financial infiltration of Khanani’s money laundering organization via a Dubai-based company and his dealings with a small New Delhi-based firm, the Indian Express said.
Pakistan
Additional reporting by ICIJ’s partners in Pakistan revealed that other companies associated to Khanani were used for multiple transactions through Standard Chartered Bank. Likewise, Deutsche Bank was also used for a transfer of $184,000, The News said. The banks didn’t comment on the case and said they’ve been improving their anti-money laundering measures.
FinCEN Files also showed banks raised red flags for transactions involving a Pakistani fertilizer company and three companies that were also reported for allegedly producing chemicals for suspicious activities, according to The News.
Japan
In Japan, reporters working on the investigation also shed light on a powerful sports entity allegedly involved in suspicious money flows.
The journalists collaborated with French colleagues to expose how a consultant of the Tokyo Olympic bid committee transferred $370,000 to the son of an influential member of the International Olympic Committee.
Records from a French criminal investigation and from a U.S. bank showed that the sum was transferred from the bank account of a Singapore consulting firm hired by the bid committee to help its efforts to bring the Summer Olympics to the Japanese capital in 2020, according to a joint investigation by The Asahi Shimbun, Kyodo News and Radio France.
Japanese news agency Kyodo News also found that clients of Japan Post Bank were flagged in the reports for transactions considered suspicious by partner banks. Japan Post Bank said it is considering strengthening their anti-money laundering measures in response to the findings, Kyodo reported.
Nepal
Journalists at the Centre for Investigative Journalism, Nepal found that, from 2006 to 2017, banks had flagged transactions involving Nepali business entities in a variety of sectors, from gold to antiquities, bitumen and telecommunication equipment.
Sri Lanka
Global banks flagged Sri Lanka as a high-risk jurisdiction for financial crimes lumping the country alongside the United Arab Emirates, India, Cyprus, Egypt and Indonesia, an analysis of the secret documents by the Sunday Times found.
South Korea
Suspicious money transactions also engulfed one of Asia’s largest companies, Samsung Electronics.
In South Korea, a 30-minute documentary by Newstapa shows the journalists travelling to Europe to investigate the giant tech company’s links to a U.K.-based subsidiary and get to the bottom of transactions red-flagged by banks.
The film also explores the role of two Korean nationals listed as directors of 400 companies that turned out to be empty shells.
Indonesia
In Indonesia, the confidential documents provided new details on the government’s purchase of jet fighters from a Russian state-owned manufacturer between 2011 and 2013. The deal had previously been on the radar of the country’s watchdog agencies for suspected corruption, Tempo reported.
The report – originally in Indonesian language – concluded, “The problem is that it is an open secret that FinCEN’s partner in Indonesia, the PPATK, often complains about the delays in following up its reports to law enforcement authorities. Furthermore, the compliance of banks in Indonesia is still an issue. As long as these fundamental weaknesses are not put right, it will be difficult to rid this nation’s financial system of the proceeds of crime.”
