It was all a fitting reminder of Bertolt Brecht’s remark that bank robbery lies in the province of amateurs. The real professionals of plunder establish banks. Last month, the labours of Buzzfeed and the International Consortium of Investigative Journalists revealed just that. Centre stage: international banking misbehaviour. And my, was there much to go on.
The journalists had been combing through leaks comprising 2,121 suspicious activity reports (SARs) filed with the US Financial Crimes Enforcement Network (FinCEN) between 2000 and 2017. The relevant amount in terms of transactions: somewhere in the order of $2 trillion. It was awfully good of the banks themselves to be filing such reports with the US Treasury. But such matters are mere formalities; there is no incentive for the bank in question to stop trading with a shady client, despite what is suspected in the report. The point is to merely keep an account of it.
The criteria for an SAR are not sharply defined. Matthew Collin of the Brookings Institute suggests a few: unclear sources and ill-defined beneficiaries; a nexus with a jurisdiction historically noted for financial crime and irregularity. Another “common sign of suspicion is one in which a client attempts to avoid attention from the authorities by making several deposits below $10,000, which is the automatic reporting threshold.”
The FinCEN Files highlight five stellar performers in the movement of illicit cash: JP Morgan Chase, HSBC, Standard Chartered Bank, Deutsche Bank and Bank of New York Mellon. A few instances are worth mentioning. Despite being fined $1.9 billion in the US for money laundering, HSBC moved money through its US operations to accounts in Hong Kong in 2013 and 2014. Central to this was a Ponzi investment scam known as WCM777.
The brainchild of Chinese national Phil Ming Xu, self-styled “Dr Phil,” the World Capital Market scheme promised returns of 100 percent profit in 100 days. Xu vigorously promoted this version of monetary paradise through social media, webinars and seminars. Gullible investors obliged, seduced by a rather grotesque combination of God and Mammon. (Xu was courting the evangelical market.) $80 million was raised and, for the unsuspecting investors, lost.
In the aftermath of the losses, direct physical harm resulted. Santa Rosa investor Reynaldo Pacheco extolled the virtues of WCM777 to family and friends.