Pakistani banks, MLOs mentioned in FinCEN leaks

Six Pakistani banks and the Khanani Money Laundering Organisation (MLO) have been named in the FinCEN files which comprise of leaked data from the US treasury regulator which implies global money laundering of $2 trillion between 1999 and 2017 via mainstream banks.

More than 2,100 Suspicious Activity Reports (SARs) had been shared by Buzzfeed News with the International Consortium of Investigative SJournalists (ICIJ) which exposed how the global financial system was unprepared against organised money laundering operations.

Globally, Deutsche Bank facilitated $1.3 trillion worth of ‘suspicious’ transactions while JP Morgan Chase passed over $500 billion while flagging the transactions in SARs, one of the millions which reached the shrinking Financial Crimes Enforcement Network or FinCEN.

The Pakistani banks with suspicious transactions reported include Allied Bank with 12 suspicious transactions worth $1,001170, UBL with 8 transactions worth $399,620, Habib Metro with 2 transactions worth $74,980, Standard Chartered with 4 transactions worth $199,860, Habib Bank Limited with one transaction worth $167,450 and Bank Alfalah with a $452,000 (sent) and $99,480 (received).

Collectively, Pakistani banks are responsible for approximately $2.5 million worth of suspicious transactions.

Also mentioned in the data leaks is Altaf Khanani of the infamous Khanani and Kalia International which was closed down by the government of Pakistan during a forex scam investigation.

Altaf Khanani had been arrested in Panama airport and sent to the United States of America for a prison term pertaining to money laundering.

Through a Danish Bank’s branch in Estonia, Khanani was alleged to launder money through the Dubai based, Mazaka General Trading and Al Zarooni Exchange. Both companies are mentioned in the leaks.

Khanani’s lawyer Mel Black told an ICIJ partner news outlet, “Mr Khanani has pled guilty and served a lengthy sentence, during which his brother died and he was separated from his family. He is in bad health.

“He is financially destitute and his ability to earn money is destroyed by his being blocked by an OFAC designation and the freezing of his accounts. He has not been involved in any business activities of any kind for five years. He looks forward to moving ahead in a simple law-abiding life.”

Deutsche Bank lost 8.76% of its share price in the aftermath of the scandal. As US President Trump’s primary lender, the bank was under intense scrutiny.

The New York Times has previously reported that even after compliance officers within Deutsche Bank raised suspicions on the transactions of Jared Kushner and President Trump, the bank decided not to file SARs on these transactions.

Former Trump campaign manager, Paul Manafort who has been convicted of fraud and tax evasion has also come up in the scandal. According to global financial giant, JP Morgan, Manafort and shell companies associated with him moved funds even after his links to money laundering had been exposed.

Similarly, HSBC was also implicated in the FinCEN leaks, with its stock price falling to its lowest point since 1995. According to the ICIJ, HSBC failed to report key facts about its customers in suspicious transactions worth approximately $900 million.

Some financial experts claim that banks have been using SARs as a type of ‘get out of jail free card’ where they alert authorities regarding their customers but fail to provide sufficient information on them and continue doing business with them regardless of their suspicions.

Several media organisations and investigative partners contributed to the FinCEN files. They include Le Monde (France), L’Espresso (Italy), Asahi Shimbun (Japan), El Espectador/CONNECTAS (Colombia), (Venezuela), The News (Pakistan), Premium Times (Nigeria) and Inkyfada (Tunisia).

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