Global Money Laundering Part I

How dirty money moves across the Global Financial System

The NY Times story shedding light on the mystery of US President Donald Trump’s tax returns has brought the issue of tax evasion and money laundering back into the limelight in recent weeks. According the NY Times, the President has avoided paying Federal income taxes in 10 of the 15 years preceding his election. Perhaps more politically damaging are the revelations that the President has paid as little as $750 (in the 2017 tax year) in years where he has paid income taxes. In comparison, in the same year the President paid taxes of $15,598 in Panama, $145,400 in India and $156,824 in the Philippines.

Despite the outrage in American politics, President Trump is far from alone in being creative with his taxes. Rather, the former businessman turned President is part of wider global trend of tax evasion by much of the global financial and political elite. About the same time that the news of Trump tax returns broke, the Financial Crimes Enforcement Network (FinCEN) of the US Treasury saw 2,100 files leaked from its servers. These files — now being dubbed the “FinCEN files” — include information on $2 trillion in transactions dated from 1999 to 2017 that had been flagged by banks as suspicious. The revelations in the FinCEN files are incendiary:

• Several underworld figures are flagged as having received $10 billion in illicit funds laundered out of Russia through shell companies engaged in carefully choreographed stock deals, known as “mirror trades.”
• Deutsche Bank, HSBC, Standard Chartered and Barclays Bank are among the major global banks that have helped facilitate suspicious transactions according to the leaks
• HSBC is being accused of repeatedly moving money for a ponzi scheme, despite warning authorities that the funds were likely to be proceeds of a crime
• Standard Chartered Bank processed almost $12m (£9.4m) in payments for Jordan’s Arab Bank from 2014 to 2016. Standard Chartered later flagged more than 900 of these transactions that it suspected might have been for “illicit activities under the guise of charity” and “related to terrorist financing”
• The scale of the laundering is immense. A small, obscure Czech bank ExpoBank has alone processed at least $29 billion in suspicious transactions for its customers.
• Bank of New York Mellon flagged $7.1 billion in suspicious…