RegSol Blog

AML Leaks: the FinCEN Files

October 2020

News outlets around the world have been reporting on a data leak involving the US Financial Intelligence Unit, FinCEN. These are the people who combat financial crime in the US and to whom Suspicious Transaction Reports are made. Suspicious Transactions Reports (STRs) are made by Banks and other financial institutions on clients that they may have suspicions about.

More than 2,500 documents on these STRs were leaked to Buzzfeed News and shared with an international consortium of journalists as was the case regarding previous scandals involving the Paradise Papers and Panama Papers. The leaked files shed fresh light on how UK legal entities called limited liability partnerships (LLPs) are playing a massive role in the flow of suspect funds through the global banking system. It has also emerged via the Irish Times that Dublin based firm IOS had facilitated these illicit flows from a rented house in Ranelagh by setting up dozens of UK LLPs connected to various scandals including the Danske Bank Scandal. Danske had allowed over 200 billion Euros worth of suspicious activity to flow through its Estonian branch which has now been shut down, the perpetrator of arguably the largest Financial Crime Scandal in Europe.

The salient point about the latest media frenzy is that banks and financial institutions are being blamed for allowing this activity to take place. Whilst banks can take action and do often deleverage high risk accounts off their books, once a STR is filed, it is up to the Financial intelligence units and law enforcement to act on the intelligence provided.
By Judy de Castro
Regulatory Consultant