A ROGUE Standard Chartered banking unit violated US 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 yesterday.
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, despite US economic sanctions, to hide roughly 60,000 transactions from 2001 to 2010.
Mr Lawsky’s order quotes a senior Standard Chartered official in London who, upon being advised by a North American colleague that its Iran dealings could cause “catastrophic reputational damage”, reportedly replied: “You f***ing Americans. Who are you to tell us, the rest of the world, that we’re not going to deal with Iranians.”
Mr Lawsky said the unit of the London-based bank was “apparently aided” by its consultant Deloitte Touche, which hid details from regulators, and despite being under supervision by the Federal Reserve Bank of New York and other regulators for other compliance failures.
The bank’s actions “left the US financial system vulnerable to terrorists, weapons dealers, drug kingpins and corrupt regimes, and deprived law enforcement investigators of crucial information used to track all manner of criminal activity”, Mr Lawsky said in an order made public yesterday.
“In short, Standard Chartered Bank operated as a rogue institution,” Mr Lawsky added.
A Standard Chartered spokesman said the bank “is conducting a review of its historical US sanctions compliance and is discussing that review with US enforcement agencies and regulators. The group cannot predict when this review and these discussions will be completed or what the outcome will be.”
It was unclear whether other companies are being targeted in the inquiry.
Mr Lawsky said he was also investigating “apparently similar”schemes to conduct business with other countries subject to US sanctions, including Libya, Myanmar and Sudan.
Deloitte, Mr Lawsky and the New York Fed did not immediately respond to requests for comment.
The Iranian embassy in Washington was not immediately available for comment. A US department of justice spokeswoman declined to comment on whether that agency was conducting its own investigation.
The charges are the latest by US law enforcement that highlight how banks might have systematically moved US dollars through sanctioned countries despite a federal crackdown. – (Reuters)
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