Friday, January 11, 2019

GFI Names the #1 Money Laundering Facility of 2018

From Global Financial Integrity, January 9:

Taking stock of 2018’s money laundering scandals: When is enough enough? (Part 2)
The first half of this two-part blog focused on the role that some of the world’s largest financial institutions played in facilitating illicit financial flows in 2018. Most of those cases centered on inadequacies in their anti-money laundering (AML) controls that resulted in record-breaking fines. The second half of this blog will look at the worst offenders of last year. In some cases, the banks had to be shut down for blatant links to criminal activity and sanctions breaches. In others, several ongoing criminal investigations looking at hundreds of billions of illicit money have set new records in the world of financial crime for the wrong reasons.

5. ABLV Bank Latvia
In February 2018, the US Department of the Treasury accused Latvia’s third largest bank of institutionalized money laundering, having facilitated illicit transactions for sanctioned entities in North Korea, Azerbaijan, Russia and Ukraine. The Treasury’s Financial Crime Enforcement Network (FinCEN) named ABLV as an institution of primary money laundering concern and invoked Section 311 of the USA PATRIOT ACT, which prevented the bank from opening or maintaining a correspondent account in the United States. The enforcement action by the US resulted in an exodus of non-resident deposits from ABLV–estimated at $600 million within the space of a week–and the inability of the bank to obtain emergency liquidity, ultimately leading to the bank’s closure.
4. Pilatus Bank
In November 2018, the European Central Bank (ECB) withdrew the license of Malta’s Pilatus Bank following allegations of sanctions evasion, money laundering, and other criminal activity. The ECB’s decision came after US authorities charged the Iranian-born owner of the now-defunct bank, Seyed Ali Sadr Hasheminejad, with organizing a scheme to evade US sanctions against Iran by illegally funneling more than US$115 million from Venezuela to Iranian-controlled companies.
Pilatus Bank was also reported to have been linked to the murder of Maltese journalist Daphne Caruana Galizia, who had been reporting on allegations of government corruption and money laundering in the months before she was assassinated in a car bombing in October 2017.
3. 1MDB and Goldman Sachs
The 1MDB scandal that first emerged in 2015 has continued to splatter big banks with fresh allegations. In December 2018, Goldman Sachs became the latest victim of the blockbuster money laundering scandal surrounding the looting of the state-owned Malaysian Development Fund (1MDB), estimated to be in the range of US$4.5 billion. Former Malaysian Prime Minister Najib Razak is said to have personally pocketed US$681 million and used the funds to buy everything from yachts and artwork to funding the production of Hollywood films including The Wolf of Wall Street.
Malaysian authorities filed criminal charges against the American bank and two of its employees for reportedly helping to misappropriate US$2.7 billion, bribing officials, and giving false statements when helping to issue bonds that would raise US$6.5 billion for the state development fund 1MDB–for which Goldman earned US$600 million in fees.

Other banks, such as Falcon Private Bank, BSI SA, Credit Suisse, UBS, Standard Chartered, Coutts & Co., and DBS Group have also faced regulatory actions due to their involvement in 1MDB, for which they have been individually fined between US$700,000 and US$5.2 million. In the case of Godman Sachs however, the Malaysian government is currently seeking US$7.5 billion in damages from Goldman Sachs and jail time of up to ten years for Tim Leissner and Roger Ng Chong Hwa, two former Goldman bankers who were at the center of the scandal...

Astute readers  are probably way ahead of me on the #1 and #2 rankings.

We had looked at the Azerbaijani connection to #4 ranked Pilatus a couple times:
Who Killed Investigative Journalist Daphne Caruana Galizia?
Pilatus: A Private Bank for Azerbaijan’s Ruling Elite...
After Reporter's Murder: "Malta's Pilatus Bank has European licence withdrawn" 
#3 was well represented by Leonardo DiCaprio back in 2016's "Questions America Wants Answered: Was Leo DiCaprio’s ‘Wolf of Wall Street’ Paid for With Stolen Money?" and by "Matt Taibbi: "The Malaysia Scandal Is Starting to Look Dire for Goldman Sachs" (GS)"
The 1MDB Fraud as told by the FBI
"The Billion-Dollar Mystery Man and the Wildest Party Vegas Ever Saw "
So, #2 and #1.

We've already seen the #1 biggest laundry 2018 win the Organized Crime and Corruption Reporting Project's Prix de Creepy, here's that post with the name redacted:
Unfortunately we used the same sharpie that Manafort's lawyers used for their redactions so our readers might ascertain the identity of the sleazeballs just by hovering over the hyperlink but do follow the GFI link just to confirm your guess.