The top money laundering cases in recent times

Money laundering has been a go to for countless criminals since taxes were first levied. Whether it was hiding high valued items in sacks of grain, or as in more recent cases, routing illegal transactions through hastily formed shell corporations.

In this day and age, banks and financial institutions must bear the brunt of allowing these fraudulent transactions to go through. Due diligence and proactive AML measures are the only things that stand in the way of hefty fines.

But sometimes, even the giants may not have everything together. Here are some of the biggest cases against the biggest names in banking.

  1. HSBC

    HSBC came under fire in 2012 after a US Senate report found that it was involved in a number of activities that were in violation of established AML laws. These included:

    • offering banking services to clients in Saudi Arabia even though they had known terrorist links
    • circumvented sanctions preventing transactions to Iran and North Korea
    • failure to treat Mexican counterpart as high-risk despite ties to drug trafficking

    It is estimated that close to $8 billion was laundered in total.

  2. BCCI

    A name long forgotten now, is estimated to have laundered almost $23 billion by creating a name for itself in the black market of arms and drug smuggling. By 1990, it had its own entanglement of shell companies, and layered its corporate structure into obscurity.

    After it was called out by a US Senate report, Price Waterhouse was tasked with further investigations. The bank closed shop before investigations were completed and while it was still owed hefty fines.

  3. Nauru

    The small, unassuming island off the coast of Australia turned into a shell corporation haven after its natural resources were depleted. As a favourite of the Russian mafia, an estimated $70 billion passed through unaccounted for.

    The US Treasury imposed extravagant sanctions on Nauru that exceeded those on Iran. However, the island turned things around and has since been taken off the FATF ‘blacklist’ as it abolished all shell banks registered there.

  4. Standard Chartered

    One of the biggest global banks was accused of helping the Iranian government launder close to $265 billion due to poor oversight and lack of checks in place. The organization paid close to $350 million in fines in 2012 and another $350 million in 2014, for not improving their AML compliance – as they had promised when they paid the first fine.

  5. Wachovia

    In 2010, one of the largest fines at the time for AML non-compliance was brought against Wachovia (since merged with Wells Fargo). It is estimated that close to $390 billion dollars were laundered by drug cartels in Mexico through the bank’s branches.

    Due to lax AML requirements in Mexico, the bank did not conduct due diligence regarding the source of funds. Thus illegal earnings became a part of the legal sector.

There are many more cases as with the recent Commonwealth Bank of Australia’s failure to comply with regulations. Similarly, close to 50 banks have been charged with participation in a $21 billion Russian money-laundering scheme.

Money laundering and the subsequent fines only seem to be rising and a permanent solution is unlikely in the near future. However, banks and FIs can take more precautionary measures and ensure their compliance is above par by partnering with an established service provider.