A "rogue" Standard Chartered Plc banking unit violated U.S. anti-money laundering laws by scheming with Iran to hide more than $250 billion of transactions, and may lose its license to operate in New York State, a state banking regulator said on Monday.
Benjamin Lawsky, superintendent of the state's department of financial services, said Standard Chartered Bank reaped hundreds of millions of dollars of fees by scheming with Iran's government to hide roughly 60,000 transactions over nearly a decade.
He said the bank was "apparently aided" by its consultant Deloitte & Touche LLP, which hid details from regulators, and despite being under formal supervision by regulators including the Federal Reserve Bank of New York for other compliance failures involving the Bank Secrecy Act and money laundering.
Now, I stress, this is not proven yet, but the accusation is a big one.
And it's being levelled against the one UK bank so far have come through all the banking debacles relatively unscathed - but which now looks like it may be the first to lose a licence.
And it's fascinating at there is explicit criticism of Deloitte. Could auditors at last be getting the blame that seems to me appropriate given how many of their regulated clients appear to have persistently failed in their obligations?
Hat tip: Robert Palmer
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Depends how far you go back in history, Richard. Standard Chartered certainly has an “interesting” past if you look into its operations in Singapore, Hong Kong, Shanghai etc and note who its directors were.
Richard
the carapace is cracking & what is oozing out smells rank.
Whatever the right think, you can’t have “clean, victimless” tax evasion, not only on the left-ish view that tax evasion steals from society & forces others to make up the share the evaders/avoiders miss, but even on the right-ish side. If you encourage tax evaders/avoiders to use your bright sunny jurisdictions on a “no names, no questions” basis then big money will flow in from people that have lots of reasons other than tax to keep this money hidden: drug dealers, kleptocrat 3rd world rulers, terrorist cells, & now, it appears, the Govt of Iran.
I wonder how much of the discussions were through the City of London & branches of the bank in (say) Guernsey, Jersey, IoM ?
Of course those rogue islands of Man, Jersey, Guernsey will be a part of this latest web of deception and fraud. Their contempt for regulation allows all the fraudsters you list to function undisturbed.
No need for paper shredders, nobody dare access these cans of worms.
Well at least not until their disgusting “industries”are finally dismantled and destroyed.
PSG
Except that there is no operation of Standard Chartered Bank in Guernsey, and indeed there hasn’t been since around the late 1980s/very early 1990s!
About the only bank that’s not lurking about on the island then.
Sure it’s not trading under a “flag of convenience”?
PSG
Please get your facts right. Shooting wildly from the hip without checking your facts isn’t clever and merely discredits your other posts, even when those are valid. There are less than 50 banks in Guernsey. And no, they are not “trading here under a flag of convenience”.
Patrick
that’s odd. According to their website
We opened our office in Guernsey in 1991 and employ 22 staff.
1st Floor, Bordeaux Court
Les Echelons, South Esplanade
St. Peter Port
GY1 4PX
Telephone: + 441 481 721 787
Fax: + 441 481 721 724
Opening hours: 09:00-17:00, Mon-Fri
Now I know you guys who specialise in “tax mitigation” & generally providing financial services to well-dodgy people would never LIE. So it seems odd you told PSG such a deliberate untruth. I’ll give you the benefit of the doubt & say you were misinformed, ha ha.
Fwiw, they’re big in Jersey so PSG’s point would’ve been valid even if you were correct – which, of course, you weren’t.
Regretably the experience that the PSG has of Guernsey based banks is that they are dishonest and fraudulent, and whatever passes for a “regulator” is a complete joke. This is not “shooting wildly from the hip” but based on prima facie evidence sufficient to course any reasonably minded person to believe that this is indeed a “fact”.
Never, ever bank on Guernsey. Unless of course you have no objection to dealing with crooks.
Fact.
William, technically Patrick is correct as there is no operation of Standard Chartered Bank in Guernsey. The company you list is a trust company, which is a seperate legal entity. Standard Chartered doesn’t hold a banking licence in Guernsey.
However I am not sure if he intended to only be “technically” correct. 🙂
Also getting PSG to actually prove any of what they state as “fact” is impossible.
Oh, a trust company for Standard Chartered is not a bank
True
But both are mechanisms for offshore abuse
PSG is right here
In addition to Standard Charter’s Guernsey office the bank is also active in more than 70 countries via a network of over 1700 branches.
Standard Charter keeps a low profile in the UK and does not offer “retail” mortgages, loans or current accounts to the public.
PS: Because Guernsey is a “secrecy jurisdiction” it is impossible for anyone to obtain “factual” knowledge about the island’s financial services industries until one becomes a victim of these activities.
A technicaly correct and provable fact.
You have been warned
.
Secrecy jurisdiction or not, it is easy enough to find out who has a banking licence in Guernsey.
http://www.gfsc.gg/Banking/Pages/RegulatedEntities.aspx
You miss the point entirely
Standard Chartered are there, moving wealth from view
“He said the bank was “apparently aided” by its consultant Deloitte & Touche LLP, which hid details from regulators ….”
Oh please, please put this scum in the dock along with them!
For the PSG this would be better than a thousand gold medals.
(Pity they couldn’t drag the ICAEW in as well)
Not that I wish to support these banks, but it’s a British bank, operating mainly in Asia, and a USAmerican law. And the ban on dealing with Iran is a political manouevre, primarily concerned with internal US politics, not an obvious legal and moral issue like tax evasion or laundering the proceeds of organised crime. I’m finding it hard to summon up moral outrage over this particular matter. Am I wrong?
Yes
It’s alleged bankers knowingly broke the law
If you’re not outraged what’s wrong with you?
The US has a lot of laws that should not apply outside the US. We should resist the attempts of the US to apply its laws extraterritorially, as is happening in other cases. One thing that makes me outraged is when the UK government fails to resist these attempts.
I agree with you that the UK government should regulate bankers better, but that is a different matter.
The question is whether this bank willingly broke the law
And the evidence looks to be rather strong that it did
But it denies it, in 99.9% of cases
Mind you there appear to be 150 million cases….
eveningperson
the Iran boycotts were introduced by a democratically elected US Govt. You could argue, lobby & even stand for election to try to change that. Likewise, you could do so for, say, lower taxes or lack of financial regulation.
What isn’t acceptable is to simply ignore democracy & not observe the boycott, or pay the taxes or acceptb the regulation.
There are a dreadful lot of people on the right, & indeed a lot of dreadful people, who seem to just think “rules are for the other schmucks”.
If that view carries on society will completely break down
Standard Chartered may be a British bank, but this money laundering took place in dollars, in New York. Standard Chartered has a US banking licence and most of its trading is in Asia and Africa and is in dollars.
If the US banking licence is revoked it will destroy this rogue bank.
Poor old Liverpool FC; another mistake in their choice of sponsors! Couldn’t happen to a more deserving club after their continuing support for Luis Suarez!
Not sure I like this from John Mann MP (on Treasury Select Committee):
“There needs to be a Parliamentary inquiry into money laundering. I am not only concerned about the scale of money laundering, but also about an increasing anti-British bias by US regulators and politicians aimed at shifting financial markets from London to New York”
I’d be very glad if London lost out to NY in this matter.
Candidly – that’s appalling
Crime is crime
And he’s reflecting a tax haven attitude towards it
And so was breaking, politically motivated, apartheid laws a crime.
I assume you found that criminalizing people like Mandela was OK then – a crime is a crime?
No – one complied with the laws of ethics – a higher authority
The other with the laws of greed – a lower authority
Maybe she get acquainted with the difference
Since it is a US law, and should the allegations prove true both for ‘Standard Chartered’ and Deloitte, then minimally both should be banned from the US markets, and existing firms in the US that work with them should be held suspect in the US.
The work done by Deloitte for any corporation should then be held suspect and as a potential site for obfuscation and potentially illegal activities. They are in over 150 countries, so that if they are banned in the US, and they have to move their HQ to some island they still have their other 149 countries to work with.
the deloitte US practice will be a separate legal entity (probably a partnership) so the US situation is unlikely to have a devastating effect on the rest of the firm – Anderson lessons learned.
Andesen did nit fail financially
It was reputation that destroyed it
The allegations against Deloitte are every bit as staggering as those against Standard Chartered.
Per the US complaint, prior to their “independent investigation” they sent to the bank the results of a couple of previous investigations they had carried out — in a gross breach of client confidentiality — thereby warning SC about the areas they were likely to be looking at for evidence of wrong doing.
Even then, SC couldn’t manage to hide all the evidence from Deloitte, so Deloitte agreed with them to water down their “independent” report so it didn’t make the bank look bad to the US authorities — i.e. the ones who had indications there were problems at SC and had commissioned the report in the first place.
(However, note that Deloitte weren’t “the auditors” — it wasn’t an audit, and wasn’t carried out by their audit section.)