US accuses Standard Chartered of laundering billions for terrorists

A UK bank hid £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, according to an explosive report.

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

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 global staff with 2,000 of them in London, had shown ‘obvious contempt’ for US financial regulations.  
 
The case echoes that of HSBC, which faces up to £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 £290million fine last month.

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

In a devastating conclusion to its report, the New York watchdog wrote that Standard Chartered was ‘motivated by greed’ and had acted ‘without any regard for legal, reputational, and national security consequences’.

‘SCB designed and 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, which reviewed more than 30,000 pages of documents during its nine-month investigation, 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 business records, failed to keep accurate books, obstructed authorities and committed ‘wilful and egregious violations of law’.
Sixty thousand financial transactions were cited as suspicious.
It even cited a response from a senior London-based Standard Chartered executive to a New York official saying: ‘You f***ing Americans. Who are you to tell us, the rest of the world, that we’re not going to deal with Iranians?’
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.
US sanctions against Tehran date back to 1979 but were heightened following the Iranian invasion of Iraq in 1980.

In 2002, the country was described by former US president George W Bush as part of his ‘axis of evil’. Standard Chartered was one of the few banks to emerge from the financial crisis intact.
When announcing record profits of £2.3billion last week, its British chief executive Peter Sands – touted as a potential successor to Bank of England governor Sir Mervyn King – said its ‘culture and values are our first and last line of defence’.

Shadow Treasury minister Chris Leslie said the allegations – if true – would be a serious blow to the bank’s reputation.

‘Coming so soon after similar failings at HSBC, questions need to be asked about whether UK regulators are ensuring that the compliance regimes and anti-corruption standards pursued by our financial services sector when operating abroad are sufficiently up to the mark,’ he added.
‘It is highly likely that the banking inquiry currently under way in Parliament will want to consider lessons to be learned from potential failings such as this.’

Last night the banking group said in a statement that it had shut down its Iran operation in 2007 and had no ‘physical presence’ there. ‘As reported previously, the group is conducting a review of its historical US sanctions compliance and is discussing that review with US enforcement agencies and regulators,’ it said.

‘The group cannot predict when this review and these discussions will be completed or what the outcome will be.’

Standard Chartered was aided in its deception by its consultant Deloitte, one of the City’s Big Four accountants, the US watchdog claimed.

It said the accountancy firm ‘intentionally omitted critical information’ in its report to regulators.


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