by Beth Connolly on August 6, 2012
A New York regulator has accused a British bank of deliberately falsifying records to hide 60,00o0 transactions with Iranian banks in order to profit, according to the New York Times. The transactions were worth $250 billion, and the bank is accused of gaining hundreds of millions of dollars in fees over a period of nine years. Banking regulations require banks to declare all transactions with Iran because of concerns of terrorist group financing.
The New York State Department of Financial Services called Standard Chartered Bank a “rogue institution” that conducted similar schemes with funds from Burma, Libya and Sudan.
Here’s more from the Times:
In the Standard Chartered investigation, the order said that the bank’s management created a formalized operating manual that showed staff members how to strip off any information from the transactions that might tie them to the sanctioned Iranian institution. The manual was called “Quality Operating Procedure Iranian Bank Processing.”
Under a strategy called Project Gazelle, which the regulator said was approved at the highest echelon of the bank, Standard Chartered falsified or omitted client identification in paperwork authorizing transactions, the order said. To drum up more revenue, the bank wanted to forge “new relationships with Iranian companies,” bank e-mails show.
The order says that executives at Standard Chartered sidelined concerns raised by its management in the United States. Concerned that the bank’s practices ran afoul of regulators and could lead to criminal liability, executives at Standard Chartered urged a thorough accounting of the bank’s Iranian business, according to an e-mail uncovered as part of the investigation.
Rather than quashing the program once concerns were raised, executives at Standard Chartered got better at shielding the wire transfers and other transactions, according to the order. What’s more, the regulator said Monday, the bank responded to calls for a review with outright hostility. A London executive of the bank was quoted in the document as having directed an expletive at Americans and adding, “Who are you to tell us, the rest of the world, that we’re not going to deal with Iranians?”
Want a daily digest of articles like this one, plus the latest compliance jobs at top-tier organizations? Join 50,000 other compliance, risk governance, and regulatory professionals and subscribe to our free afternoon newsletter. Where do you find news, style, and career all in one place? The Executive Gateway, our new lifestyle magazine.