Friday, December 1, 2017

From HSBC to Bangladesh Central Bank: Four times when a global network of financial laundering was uncovered

As the controversial Panama Papers continue to make headlines, a look at scandals that uncovered a global network of financial laundering.

In 2008, Herve Falciani - an employee with HSBC Suisse - stole details of 1,30,000 customers who had secret accounts with the bank. The data, leaked to the press in 2015, revealed that HSBC had aided clients in over 200 countries evade taxes on accounts worth nearly $119 billion.

Individual investigations in countries like the US also found that the bank's 'laundering list' of clients included Mexican drug cartels and rogue nations. While HSBC didn't face criminal charges, it was fined 40 million Swiss francs by Geneva for "organisational deficiencies".

Satyam Computer Services
In 2009, the company's founder B Ramalinga Raju confessed to cooking the company's books to the tune of Rs 7,136 crore. The Enforcement Directorate also charged Raju and his cohorts for diverting several hundred crores from the accounts of Satyam towards investments for another company called Maytas (an inversion of 'Satyam'). An RBI official told the media in 2009 that, "In all, there is at least Rs 600 crore in six bank accounts in Mauritius that were linked to the Satyam scam." In 2015, Raju was sentenced to prison and fined Rs 5.5 crore.

In March this year, Bangladesh's central bank reported that $100 million had been stolen from its account at the US Federal Reserve by cyber criminals. $81 million of that money was traced to the Philippines, where it was believed to have been remitted into the accounts of three casinos. Another $20 million had reportedly been transferred to Sri Lanka. In response, anti-money laundering officials in Philippines began a formal investigation into local institutions, which had abetted the illegal movement of these funds while Bangladesh's central banker Atiur Rahman resigned.

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