Standard Chartered in money-laundering scandal
Standard Chartered has become the latest UK bank to be accused of illegal activity.
It has been accused by the New York department of financial services of hiding $250 billion worth of illegal transactions with Iranian banks between 2001 and 2010.
The US regulator claims that the bank, which has wholesale banking, corporate finance and dollar clearing operations in New York, ‘schemed’ with the Iranian government to hide 60,000 transactions.
Standard Chartered’s actions were ‘deceptive and fraudulent’ the regulator claims and it is calling for the bank’s New York banking licence to be revoked.
It also wants Standard Chartered to pay for an independent monitor to make sure it complies with US law in the future.
Under US law, sanctions are applied to financial transactions with Iran because of concern that US institutions could be used to finance nuclear programmes or terrorist groups in Iran.
Benjamin Lawsky, department superintendent at the New York department of financial services, said that Standard Chartered had “left the US financial system vulnerable to terrorists, weapons dealers, drug kingpins and corrupt regimes” through its actions.
The regulator claims that Standard Chartered concealed that transactions were being carried out for an Iranian client by stripping messages of data showing the client’s nationality.
It also claims the bank carried out so-called U-turn transactions, which are prohibited by US regulations.
U-turn transactions involve the transfer of funds from one foreign bank to another, via a US financial institution.
Standard Chartered has denied the allegations but its shares fell 20 per cent by lunchtime today in London, and 16 per cent in Hong Kong.
The banks says it “strongly rejects the position or portrayal of facts as set out in the order” issued by the New York department of financial services.
Meanwhile, a former Lloyds Bank employee, Jessica Harper, has admitted committing a £2.4m fraud while she was in charge of online security at the bank.
Ms Harper had been accused of submitting false invoices to claim payments totalling £2,463,750 between 2007 and 2011.