Here's Why The FinCEN Files Matter

BY LILY BARTIN AND EMILY RIVERA SEPT. 24, 2020
______

For years, the Western banking industry, aided by the government, turned a blind eye to the transactions of terrorists, drug cartels and Ponzi schemes.

What should I know?

On Sept. 20, BuzzFeed News leaked thousands of U.S. government documents, dubbed “the FinCEN Files,” to the International Consortium of Investigative Journalists.¹
The FinCEN Files, as reported on by BuzzFeed News, reveal decades of widespread corruption and “suspicious activity” in the Western banking industry.

The suspicious activity includes transactions with organizations linked to the Taliban, drug cartels and Ponzi schemes.²
The file, containing more than 2100 suspicious activity reports, was requested by Congress in the investigation of Russian interference in the 2016 presidential election.³

Banks are required by law to file reports denoting suspicious transactions, called suspicious activity reports (SARs). The FinCEN Files reveal that, in most cases, Western banks filed SARs—but then turned a blind eye to insidious transactions in order to continue quietly profit off of them.
Banks compiled these documents and shared them with the government; however, until now, they have been hidden from the public.

The leaked documents include thousands of “suspicious activity reports” detailing illegal activities that have gone unchecked by the US government.⁴

What does this mean?

In short, FinCEN reports reveal an alarming pattern, from both business and government sectors, of neglecting criminal activity when there is profit to be made.
Global banks filed suspicious activity reports on transactions totalling over $2 trillion between 1999 and 2017.⁵

Documents leaked to the ICIJ show that these suspicious transactions were reported years after being cleared by banks.⁶

The 2100 SARs revealed comprise only 0.02% of the total reports submitted. This means that the $2 trillion in dirty money exposed is only a small percentage of the possible criminal transactions.⁷
Documents reveal governmental neglect in cases of money laundering. In 2014, for instance, a massive Dubai-based gold conglomerate was flagged as a money laundering operation. When this was brought to the U.S. Treasury, the department declined to act.⁸
In the instances when the U.S. government penalizes banks, they often rely on deferred prosecution agreements, in which there are fines but no high-level arrests.⁹

Under the direction of former deputy attorney general Rod Rosenstein, the Trump administration has made it even more difficult to hold executives accountable.¹⁰

In 2019, FinCEN received more than 2 million SARs,¹¹ yet Buzzfeed News reported that sources at FinCEN say most SARs are never read.¹²
The FinCEN Files investigation revealed that major financial institutions often fail to perform basic checks on their customers.¹³
Lawmakers are calling for a bipartisan bill, the Anti-Money Laundering Act (AMLA) of 2020, to be added to the National Defense Authorization.¹⁴

In a Quote:

“By utterly failing to prevent large-scale corrupt transactions, financial institutions have abandoned their roles as front-line defenses against money laundering,” Paul Pelletier, a former senior U.S. Justice Department official and financial crimes prosecutor, told ICIJ.¹⁵

—International Consortium of Investigative Journalists: Global banks defy U.S. crackdowns by serving oligarchs by serving oligarchs, criminals and terrorists

Here's Why The FinCEN Files Matter

What should I know?

What does this mean?

In a Quote:

References: