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British bank tied to cash laundering
Accused in scheme with Iranian clients
ALBANY, N.Y. — A British bank schemed with the Iranian government to launder $250 billion from 2001 to 2007, leaving the U.S. financial system “vulnerable to terrorists,” New York’s financial regulator charged Monday.
State Financial Services Superintendent Benjamin Lawsky signed an order that requires London-based Standard Chartered Bank to answer his questions following an investigation into “wire stripping,” the practice of removing crucial identifiers in financial transactions.
The state agency called the bank a rogue institution and quoted one of its executives as saying: “You [expletive] Americans. Who are you to tell us, the rest of the world, that we’re not going to deal with Iranians.”
The bank conspired with its Iranian clients to route nearly 60,000 different U.S. dollar payments through Standard Chartered’s New York branch “after first stripping information from wire transfer messages used to identify sanctioned countries, individuals and entities,” according to agency’s order.
The order said the transactions provided the bank with millions of dollars in fees at a time when such trade was restricted.
Standard Chartered Bank said in a statement Monday that it was reviewing “its historical U.S. sanctions compliance and is discussing that review with U.S. enforcement agencies and regulators.” It said it couldn’t predict when the review and the discussions would be completed “or what the outcome will be.”
The bank also said it had no prior notice of the order.
A government official said Monday that the FBI’s New York office has been investigating the matter to determine whether criminal charges should be brought. The official wasn’t authorized to discuss the probe and spoke to the Associated Press on the condition of anonymity.
An FBI spokesman declined to comment.
The state agency said the bank’s actions “left the U.S. financial system vulnerable to terrorists, weapons dealers, drug kingpins and corrupt regimes and deprived law enforcement investigators of crucial information used to track all manner of criminal activity.”
The bank stripped information from the money transfers that is used to identify countries being sanctioned and replaced it with false entries or returned it to Iran for “wire stripping” and resubmission, according to the order.
The bank “developed various ploys that were all designed to generate a new payment message for the New York branch that was devoid of any reference to Iranian clients,” according to the order.
The order also identifies an October 2006 “panicked message” from a London group executive director who worried the transactions could lead to “very serious or even catastrophic reputational damage to the group.”
If proven, the scheme would violate state money-laundering laws. The order also accuses the bank of falsifying business records, obstructing governmental administration, failing to report misconduct to the state quickly, evading federal sanctions and other illegal acts.
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