In Laundering Case, a Lax Banking Law Obscured Money Flow

by The Compliance Exchange on August 9, 2012

The list of global banks that have been accused in recent years of laundering foreign transactions totaling billions of dollars has been growing — Credit Suisse, Lloyds, Barclays, ING, HSBC — and nowStandard Chartered.

The details in each case are different, with the international banks suspected of using their American subsidiaries to process tainted money for clients that included Iran, Cuba, North Korea, sponsors of terrorist groups and drug cartels.

What the cases have in common is that the accused banks took advantage of a law that was not changed until 2008 and that allowed banks to disguise client identities and move their money offshore. The cases, including one filed this week by New York’s banking regulator against Standard Chartered, also cast a harsh light on just how much activity with Iran was permitted in the years leading up to 2008 and whether the practices had violated the spirit, if not the letter, of the law.

To read more go to The New York Times