UK Bank Accused of Laundering Cash for Terror Groups

Daily Mail (London), August 7, 2012 | Go to article overview
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UK Bank Accused of Laundering Cash for Terror Groups


Byline: James Salmon Banking Correspondent

A UK bank hid [pounds sterling]160billion of transfers that helped finance terror groups and Iran's nuclear weapons programme, it was claimed last night.

In another devastating blow to the City of London's reputation, Standard Chartered is accused of conspiring with Tehran for almost ten years. Regulators in New York said it was a 'rogue institution' that broke sanctions imposed on Iran and put profits ahead of global security and the law.

It worked with three Iranian banks suspected of being used by Tehran to finance its weapons programmes, accordlated ing to a report.

US authorities suspect the Iranian banks also funded terrorist groups, including Hezbollah, Hamas and the Palestinian Islamic Jihad.

The New York State Department of Financial Services accused Standard Chartered of doing business with Burma, Libya and Sudan, which are also under sanctions.

It said the London-based bank, which has 87,000 staff, 2,000 of them in London, had shown 'obvious contempt' for US financial regulations.

The case echoes that of HSBC, which faces [pounds sterling]600million in fines for laundering billions of pounds for Mexican drug lords and rogue states.

The world of banking has already been rocked by the 'Libor' rate-rigging scandal that landed Barclays with a [pounds sterling]290million fine last month.

At least 15 financial institutions, including Royal Bank of Scotland and Lloyds, are being investigated over concerns that rogue traders manipu-crucial interest rates which are used to set mortgages and are linked to trillions of pounds of investments.

The New York watchdog wrote that Standard Chartered was 'motivated by greed' and had acted 'without regard for legal, reputational and national security consequences'.

'SCB implemented an elaborate scheme by which to use its New York branch as a front for prohibited dealings with Iran - dealings that indisputably helped sustain a global threat to peace and stability,' the New York regulators alleged.

The watchdog said Standard Chartered covered its tracks by removing information from wire transfer messages used by US authorities to identify sanctioned countries - a process known as 'wire stripping'.

The regulator said in 'its evident zeal to make hundreds of millions of dollars at almost any cost' the bank falsified records, failed to keep accurate books, obstructed authorities and committed 'wilful and egregious violations of law'.

Sixty thousand financial transactions were cited as suspicious.

The Americans have threatened to revoke the licence of Standard Chartered in the US, which makes most of its money in Asia and sponsors Liverpool Football Club.

For nearly a decade until 2010 the lender 'engaged in deceptive and fraudulent misconduct' to move money through its New York branch on behalf of Iranian clients.

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