FinCEN Files

• 1. Introduction

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  The FinCEN Files landed on the 20th of September 2020. The number at their center was almost impossible to hold in mind: two trillion dollars. That figure was the combined value of more than 200,000 suspicious financial transactions, each one flagged by a bank as potentially criminal. The 2,657 leaked documents came from the United States Treasury's Financial Crimes Enforcement Network. BuzzFeed News obtained them in 2019 and shared them with the International Consortium of Investigative Journalists. The Miami Herald called them "the most detailed U.S. Treasury records ever leaked." Four hundred journalists in 88 countries worked through the material before a single word went public. What they found pointed to a question with no comfortable answer. If the banks flagged these transactions themselves, and the government held the records, why did so little change?

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• 2. A System Built to Watch

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  FinCEN collected more than two million suspicious activity reports in 2020 alone, while its staff had shrunk by 10 percent over the previous decade. The agency, a bureau of the United States Treasury, exists to gather and analyze financial intelligence about potential crimes. Financial institutions are legally required to file one of these reports, known as a SAR, whenever they suspect a client of wrongdoing. The reports are not themselves proof of crime; FinCEN describes them as vital investigative tools. Unauthorized disclosure of a SAR is a federal criminal offense, so the public has no window into what the reports contain or whether action follows. BuzzFeed News sources claimed that most SARs are never read or acted upon. Banks are also required to take independent action against suspicious activity, not merely file a report and move on. The files BuzzFeed published represented less than 0.02 percent of the more than 12 million SARs filed with FinCEN during the period they covered. Some of the records BuzzFeed reported on had been gathered during Congressional investigations into Russian interference in the 2016 United States elections.

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• 3. The Banks Named

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  Deutsche Bank appeared in 62 percent of the leaked filings. The ICIJ and Deutsche Welle reported that the German lender was responsible for $1.3 trillion in suspicious transactions. That total came even after Deutsche Bank had paid hundreds of millions in fines for violating United States sanctions. BuzzFeed News described Deutsche Bank as a major conduit for organized crime, terrorist financing, and drug trafficking. BuzzFeed also named JPMorgan Chase, HSBC, Standard Chartered, and Bank of New York Mellon as involved in money laundering. The ICIJ's broader reporting flagged a longer list of institutions. These included American Express, Bank of America, Bank of China, Barclays, and China Investment Corporation. Also on the list: Citibank, Commerzbank, Danske Bank, First Republic Bank, Société Générale, VEB.RF, and Wells Fargo. At least 20 percent of the leaked filings involved addresses in the British Virgin Islands.

  At the time of publication, HSBC was already operating under a deferred prosecution agreement. The agreement related to its laundering of $881 million on behalf of the Sinaloa cartel and the Norte del Valle cartel. Barclays, separately, appeared in SARs connected to Arkady Rotenberg, a close associate of Vladimir Putin under sanctions for his role in the Russo-Ukrainian War. The BBC assessed the United Kingdom as a "higher risk jurisdiction" given the volume of British companies named in the reports.

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• 4. Money Without Borders

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  Jho Low's name ran through 103 suspicious transactions worth $2.53 billion, routed through Citibank, Deutsche Bank, HSBC, JPMorgan Chase, and Bank of New York Mellon. Low was alleged to be the central figure in laundering proceeds from Malaysia's 1Malaysia Development Berhad, a government investment fund. In Macau, 62 transactions totaling more than $68.2 million were flagged as potentially suspicious between 2000 and 2017. The funds moved through the Bank of China, Banco Nacional Ultramarino, the Industrial and Commercial Bank of China, and HSBC Macau. In the Philippines, two remittance agents, Philrem Service Corp. and Werquick Inc., sent more than $1 billion in suspicious wire transfers between 2012 and 2016. Both were also connected to the 2016 theft of funds from Bangladesh Bank.

  Isabel dos Santos, the Angolan businesswoman, was flagged for money laundering in 2013. Australian banks were flagged for $167 million in potentially dirty money: $123 million ran through Macquarie Group and $44 million through Commonwealth Bank. The Indian Express reported that Jindal Steel and Power was flagged by Deutsche Bank for money laundering.

  In Japan, a consulting firm linked to the Tokyo Olympic 2020 bid committee paid $370,000 to Papa Massata Diack. Diack is the son of Lamine Diack, former president of the International Association of Athletics Federations. A total of $2 million from the bid committee passed through a Singapore firm called Black Tidings into a Citibank account. Lamine Diack was jailed for corruption and breach of trust by a Paris court in 2020. Iranian-Turkish gold trader Reza Zarrab also appeared in the files. The SARs traced his scheme to evade economic sanctions on Iran. That scheme was also tied to the Magnitsky tax fraud and broader Russian money laundering operations.

  In Ireland, a Dublin company called International Overseas Services Group was linked to 646 of 2,100 Scottish and English company SARs in the files. That figure was the highest count for any single entity in that category. The company's founder likened himself to the innocent seller of a criminal getaway car.

  In the Americas, former Mexican president Enrique Peña Nieto was implicated in money laundering. Argentine company Vicentin was flagged as well. Footballer Javier Mascherano was reportedly flagged for transactions totaling more than $1 million through his British Virgin Islands company, Alenda Investments Ltd. NBC News reported that North Korea laundered money through United States banks via shell companies and Chinese firms.

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• 5. The Response

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  Four days before the FinCEN Files were published, on the 16th of September 2020, FinCEN announced it would overhaul its money laundering programs. The timing drew immediate attention. On the 21st of September, bank stocks fell sharply worldwide. HSBC shares dropped to their lowest point in 25 years. The European Parliament convened a formal hearing on the issues raised by the files on the 9th of October 2020.

  Senators Elizabeth Warren and Bernie Sanders both called for legislative reform. Warren pushed for her "Ending Too Big to Jail Act," which would impose real legal consequences on banks caught breaking the law. Sanders called the laundering described in the files "just some of the routine business practices on Wall Street." He added that "the business model of Wall Street is fraud." Linda A. Lacewell, superintendent of the New York State Department of Financial Services, wrote that individual bankers are rarely held accountable. Money laundering, she argued, becomes a source of profit when fines are lower than the gains.

  FinCEN itself condemned the leak. The agency said the disclosure could affect United States national security and threaten the safety of those who file FinCEN reports. American Express and Bank of China did not respond to BuzzFeed News at all. Bank of America and First Republic Bank declined to comment. Valdis Dombrovskis served as Latvia's prime minister from 2008 to 2014. He told the ICIJ that his governments had enacted important reforms to address money laundering. The Central Bank of the United Arab Emirates, the files showed, had failed to act on suspicious activity reports related to sanction evasion involving Iran.

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• 6. The Insider

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  In June 2021, a FinCEN employee named Natalie Mayflower Sours Edwards admitted to leaking the suspicious activity reports to BuzzFeed News. BuzzFeed subsequently confirmed her as the source. Edwards maintained throughout that she acted as a whistleblower, seeking to expose what she described as corruption within the government. A federal court sentenced her to six months in federal prison. The reporting series she made possible was named a Pulitzer Prize finalist in the international category in 2021.

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