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NY regulator: British bank helped Iran evade sanctions, hide billions
A British bank has been accused of flouting U.S. money-laundering laws by helping Iran hide at least $250 billion from regulators over the last decade, operating as a "rogue institution," according to a New York state regulatory report.
New York's Department of Financial Services issued a lengthy report Monday that found that a branch of Standard Chartered repeatedly helped the Iranian government skirt sanctions by steering funds through its New York branch across roughly 60,000 transactions, and could have its license to operate in New York revoked.
Citing communications between bank officials, the regulators depicted tension between the American and British branches of the bank. In one 2006 message, the bank's chief executive for the Americas warned its Iranian dealings could result in "very serious or even catastrophic reputational damage."
The report went on to quote a New York branch officer of the bank, who said the British Group Executive Director of the bank dismissed the worries out of hand.
"You f---ing Americans. Who are you to tell us, the rest of the world, that we're not going to deal with Iranians," the report stated, according to the New York official's retelling.
The report found that the bank falsified records and withheld information from regulators in "evident zeal to make hundreds of millions of dollars at almost any cost."
"In short, Standard Chartered operated as a rogue institution," the report stated.
It added that the bank was "apparently aided" by the consulting firm Deloitte & Touche, as it omitted information in its own reports of bank activities to regulators.
A Standard Chartered spokesman told Reuters the bank is "conducting a review of its historical U.S. sanctions compliance and is discussing that review with U.S. enforcement agencies and regulators. The group cannot predict when this review and these discussions will be completed or what the outcome will be."
The findings come just days after the Obama administration announced new sanctions on Iran, as the White House continues to ramp up pressure to stifle that nation's nuclear development program.
It also comes on the heels of another British banking scandal, as regulators and investigators are probing for potential manipulation of a key interest rate, the London Interbank Offered Rate (Libor). The British bank Barclays agreed to pay nearly half a billion dollars to settle charges it worked to manipulate the benchmark rate for several years, including during the financial crisis.
The report also noted that while the initial probe was just to examine the bank's relationship with Iran, the regulator subsequently discovered evidence of similar schemes with other sanctioned nations, like Libya, Myanmar and Sudan. Those investigations are still ongoing.
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