We’re some of the FinCEN Files journalists who revealed how banks profit from money laundering. Ask Us Anything!

If you had to explain the entirety of this to a five-year-old how would you explain it to them while also giving them the gravity of the situation?

Please answer this one ☝️

"Banks are huge, wealthy companies that help us move our money for good reasons but they also help bad people move money for bad reasons. Banks are doing a terrible job at stopping bad people move bad money. Also, the people in our government who are meant to get the banks in trouble when the banks screw up aren't being tough enough."

That's just a quick summary! It would still have to be a pretty alert five year-old!!

We also took a stab at it in this video, where you can meet Ivan - our fictitious crime boss. https://www.icij.org/investigations/fincen-files/watch-how-money-is-laundered-through-new-york-banks/

​

– Will

Hii. I watched your crime boss video. Great video. What would you folks recommend to remedy this situation? That banks investigate the suspicious act? That they not be able to take a fee? Who is responsible for looking into the SARs after they are reported? How often are they investigated? What is are the penalties if the money turns out to be dirty? Thanks for your time and your hard work!!

Glad you liked the video :D

This was a good example of what can be done - we'd rather leave it to the experts.

James S. Henry, a New York-based economist, attorney and author who has been investigating the world of dirty money since the 1970s, says American enforcement actions over the past two decades have had some impact on large banks’ behavior — at least compared to an earlier era when they operated with almost no restraints.

But he said it’s going to take “more prosecutorial will and international collaboration” to truly change the relationship between banks and illicit cash flows. That includes holding banks as institutions — as well as top bankers themselves — accountable.

“We have to put some senior executives who are in charge of this stuff at risk,” Henry said. “And that means fines and/or jail.”

Once the SARs are filed FinCEN shares them with law enforcement authorities including the Federal Bureau of Investigation and U.S. Immigration and Customs Enforcement. They are used to detect crimes, but cannot be used as direct evidence to prove legal cases. (SARs explained here for more questions like that!)

Given that the banks here filed SARs to report the activity, and presumably applied their internal risk rating methodology to either elevate the rating of the customer or force a risk exit, what is it that you feel they actually did wrong? Since it's the government that is responsible for law enforcement, what risk/compliance control do you believe failed here? You mention elsewhere that you believe stronger enforcement of Beneficial Ownership rules would help to address this issue, but given that the FinCEN CDD Rule came into effect only in May 2018, what beneficial ownership information should the banks have collected and what regulatory cudgel could they have used to compel customers to provide this information?

This - I read the article and it seemed to suggests that banks with more SARs are more suspect. But shouldn’t it mean that if they are filing SARs then their internal risk and compliance controls are catching the suspicious activity? Isn’t it MORE suspect if there are large banks out there who aren’t filing SARs?

One extra important thing to remember is that we got to review more than 2,100 reports. 98% of them were filed between 2011 and 2017. That represents less than 0.02% of the more than 12 million suspicious activity reports that financial institutions filed between 2011 and 2017. Most of the files were filed by Deutsche Bank, JP Morgan, Standard Chartered, HSBC, Barclays, Bank of New York Mellon.

Some of the records were gathered as part of U.S. congressional investigations into Russian interference in the 2016 U.S. presidential election; others were gathered following requests to FinCEN from law enforcement agencies.

What we are reporting should always be understood under this context. This what we found in this specific trove. Hope this helps!

Emi

There is another part of the story tied to this. Which is the Know Your Customer part. For an important proportion of the transactions flagged by the banks, the banks didn't have enough information of who their customer was. "In more than 620 of the reports, banks flagged the use of “high risk” jurisdictions at least once. Corporate account holders often provided addresses in the U.K., the U.S., Cyprus, Hong Kong, the United Arab Emirates, Russia and Switzerland. At least 20% of the reports contained a client with an address in one of the world’s top offshore financial havens, the British Virgin Islands."

Emi

How are any of you still breathing? This is a serious question, the people you're pursuing are known to use extreme methods and violence to get what they want, are you and your team concerned for your safety? What, if any, steps can be taken?

We take the security of us and our partners very seriously. Some countries are more risky to report in than others. Especially during the Covid era, many professions -- especially essential jobs that are often low wage -- also carry significant safety hazards. -Spencer

Have you received threats or felt unsafe?

We could build a cubby house with the amount of pages we at ICIJ get from threatening lawyers. But largely because of US media protections, we at ICIJ are safe. It's unfortunately not the same for many partners. I know of journalists in Liberia and Ghana, for example, who were threatened by the subjects of their stories before publication. They published their stories anyway because the journalists know it is important. - Will

Is it frustrating watching this vanish in the news cycle?

Hi there,

Emi here. ICIJ, BuzzFeed News and media partners are still investigating. We will continue reporting on more stories that come out as the result of the investigations done by the team. Stay tuned!

Certain banks seemingly get caught so often it’s comical. What is the real incentive to stop facilitating money laundering?

There are real victims of money laundering. It affects regular citizens. We can read more about why should we care in this story: https://www.icij.org/investigations/fincen-files/unchecked-by-global-banks-dirty-cash-destroys-dreams-and-lives/

- Will

I think the intended question was - What might incentivize the Banks to stop facilitating it?

the answer is "massive regulatory fines and oversight", but the rule of law means nothing right now.

And Prison. Don't leave out prison.

Can we quote one expert from our story to answer this?

"James S. Henry, a New York-based economist, attorney and author who has been investigating the world of dirty money since the 1970s, says American enforcement actions over the past two decades have had some impact on large banks’ behavior — at least compared to an earlier era when they operated with almost no restraints.

But he said it’s going to take “more prosecutorial will and international collaboration” to truly change the relationship between banks and illicit cash flows. That includes holding banks as institutions — as well as top bankers themselves — accountable.

“We have to put some senior executives who are in charge of this stuff at risk,” Henry said. “And that means fines and/or jail.”

Alongside the laundering, have you also uncovered bribery or other crimes associated with these practices?

Check out our work in last year's Bribery Division investigation! https://www.icij.org/investigations/bribery-division/ -Spencer

Yes, our reporting has also touched other alleged crimes. We, for example, found suspicious transactions tied to more than 20 companies and individuals flagged by the banks that were linked to corruption, fraud, embezzlement or sanctions evasion cases (and produced an interactive to present key details about these clients). You can read more about it here: https://www.icij.org/investigations/fincen-files/confidential-clients/

Emi

Would you ever consider working with graphic designer(s) to interpret any of the data and findings and produce infographics and digestible content? I'm an MA Design student and I'd love to work with you guys on something like that.

Please send us your information. We have an amazing team working on data, infographics and design, and of course, it's always great for us to know about people who are interested in collaborating with us. You can email [[email protected]](mailto:[email protected]).

Thanks!

Emi

Will money laundering stop when the first C-suite executive is arrested and convicted? How big to fines need to be to prevent this kind of behavior moving forward?

I heard over and over again that incentive structures are are the biggest problem here. An actual threat of criminal prosecution -- or the implicit threat of that -- would be a powerful disincentive to profit off of dirty money. I don't think that's currently a disincentive that anyone in C-suite finance seriously takes into account -Spencer

What do you think is the best way to frame your findings in conversations on “Main Street”?

In other words, how do we inform “regular” people about this stuff in a way to get them to actually care?

P.S. Thanks for your incredible work! Stay Safe!

Thanks for your question and your appreciation of our work. One of the ways we tried to frame the findings and important of FinCEN Files was through harm to the kind of person you or I might know. After all, deadly drugs couldn't come to North Carolina without a bank account or a Western Union transfer. I think it's important we all understand that failures by financial institutions lead to harm to people. - Will

First thanks for doing the AMA. How did you guys get into this kind if reporting?

If by "this kind of reporting" you mean offshore, global financial skullduggery, then for me and a few of us it's because ICIJ has become something of a magnet for financial leaks. I've been doing offshore related stories since 2014 with ICIJ's Swiss Leaks and /r/PanamaPapers, for example. Most reporters who worked on FinCEN Files aren't financial, banking or economic journalists. But after a year of digging, you soon get the gist! - Will

What has alarmed you most from what you have found?

Just how few questions banks seem to ask about money sent from or two shell companies (with no obvious owners). - Will.

How are the banks profiting off it and what sort of regulations would be needed in the future to stop this from happening?

What we have seen from the reporting and what we have heard from experts include beneficial ownership regulations, for example. An ICIJ analysis found that in half of the reports, banks didn’t have information about one or more entities behind the transactions.

Emi

Do you think this will lead to anything changing? I feel like we hear about these things almost yearly (Panama papers come to mind) yet, no big arrests are made and further solidifies rich people can get away with anything.

There are already calls by top politicians for reforms in various countries, including by Bernie Sanders and Elizabeth Warren here in the U.S. https://www.icij.org/investigations/fincen-files/fincen-files-bernie-sanders-and-elizabeth-warren-join-watchdog-groups-in-calling-for-banking-reforms/

Why is this not covered by the media?

The FinCEN Files is a collaboration of more than 400 journalists in 88 countries. 110 media outlets were involved (including ICIJ). You can see all participant medias here to look at the coverage: https://www.icij.org/investigations/fincen-files/fincen-files-media-partners/

​

Emi

A huge amount of different news stories have been breaking over the past few days. All things considered, we've gotten some coverage this week in the general press and fairly heavy coverage in the financial press, especially on Monday when bank shares fell.

-Spencer

Someone i know works for unclaimed property in the department of commerce. many people call in saying that their bank sent their money (usually from retirement accounts) to unclaimed property because of inactivity (even though they're retirement accounts whoch arent supposed to be active) but some people calling in make sure to actively check their account and what not. The bank apparently sends letters that alert people that their money is being sent to unclaimed property but people claim they dont ever get these letters. Also, when the people call to claim their money, the bank is in the process of sending it to the department of commerce so people have to wait many months to get it back. This person i know hypothesizes that the banks are doing this on purpose -- making up reasons to send peoples money to unclaimed property using those months inbetween closing the account and sending it to have essentially free money to do whatever they want with and not have to pay interests since the money is "on its way to unclaimed property". Do you think there's any truth behind this? Hopefully this makes sense but again, this is someone i know so i dont have as much information as they do.

If someone has a tip, they can always contact us https://www.icij.org/leak

Or message us on Reddit and we'll put you in touch with the right people :)

Buzzfeed has a stunningly bad name in the world of global reporting.

Do you worry that your work will be tarred because of the vehicle in which it is delivered?

Hi! Will here. I would politely but strongly disagree. BuzzFeed News (different to BuzzFeed) has done some amazing, award-winning work. Many of the colleagues we worked with FinCEN Files from BFN were Pulitzer Prize finalists. And then there is Tom Warren's amazing WWF expose! https://www.buzzfeednews.com/article/tomwarren/wwf-world-wide-fund-nature-parks-torture-death

I am looking for a service that avoids particular entanglements with few reductions for the purposes of administrative revenue enhancements while ensuring that Bobby doesn't get wind of my operations. I should also mention that I have a strong desire to ensure that any sweeteners used, exclusively in a cuppa, naturally, and administrative charges paid should be obscure to any transpicuous-seeking individual. Given your recent expertise, if I need to reorganise my lucre through an appropriate agent, which would you recommend?

I don't fully understand your question but I appreciate your imaginative writing style. -Spencer

I would like to thank all of you who investigated and work on the FinCEN Files. Also thank you for releasing Datashare on an open source licence.

Is Datashare specific for these files and investigation or can it be used for collaborative work?

Were any of you worried for your safety during the investigation? Were there threats made, either legal or other sorts?

We use Datashare for all our investigations now! No looking back - we are always improving it (well our amazing tech team!)

It helps keep us and our partners safe. Some of our partners were threatened prior to publication.

Over the years, it has become increasingly obvious that the ones who benefit the most with 'privacy' are the ones that have the most to hide, especially when those responsible of banking systems have incentives to collaborate with corruption for their own profit.

If we are ever able to move to a new paradigm where we have open transparency on pools of money that deserve eyes on them (such as public infrastructure) as well as the safety of private transactions when we need them, I hope very much we can overcome this industrial-scale money laundering - specifically via distributed ledger and blockchain technology. Problems can only be resolved with increased transparency, equivalent for all parties in the system, and obviously more problems happen when you have disproportionate transparency granted to a select few. Do you agree with this perspective? Otherwise how do we go about stopping this in the future?

A version of this idea is one of the areas that many experts agree would help solve many problems of dirty money -- but it's not complete transparency. Many have been pushing for banks to automatically share account ownership information with law enforcement authorities https://www.icij.org/investigations/paradise-papers/key-us-anti-laundering-law-stalled-despite-bipartisan-support/

Hello, thank you very much for doing this AMA.

​

Would you care to comment on involvement in these activities by some of the less often mentioned banking groups when it comes to breaking regulations lately, such as Erste, ING, Raiffeisen, Unicredit, Commerzbank...?

Our reporting partners have done some excellent work on a few banks that are less often mentioned in the US press. Here's a summary of some of their work on ING's Polish operation: https://www.riskscreen.com/kyc360/news/ing-bank-worked-for-russian-money-laundering-network/

-Spencer

Hi,

thanks for your question. The project is based on more than 2,100 SARs. A large proportion of them were filed by Deutsche Banks, JP Morgan Chase, Standard Chartered, HSBC and Bank of New York Mellon, that's why there are many revelations tied to those and they appear frequently in our stories. The data connects to many other banks and of course we will continue reporting.

Emi

Thanks for joining! I know that our partners and colleagues in Austria, the Netherlands and Germany have been reporting since Sunday on some of these banks. For example, Investico in Amsterdam published this on ING. https://www.platform-investico.nl/artikel/ing-maakte-heimelijk-45-miljoen-over-voor-spaarpot-van-poetin/

Check out our partners' page and then have a look around their websites. https://www.icij.org/investigations/fincen-files/fincen-files-media-partners/

​

- Will

What's next for you guys?

Always something, plenty still to be done on FinCEN Files as well!

will this be any different from the Panama papers leak, where nothing happened?

Things did happen after the Panama Papers: https://www.icij.org/investigations/panama-papers/what-happened-after-the-panama-papers/

The Panama Papers brought lots of impact: we were able to document that at least $1.2 billion were recovered by governments as a result of the Panama Papers publication (https://www.icij.org/investigations/panama-papers/panama-papers-helps-recover-more-than-1-2-billion-around-the-world/). There were also investigations opened, resignations from primer ministers and other politicians in different parts of the world, among others. Investigations are still ongoing.

We are already starting to see impact from this project, as Spencer said. And we will continue monitoring and documenting the impact.

Emi