Attestation Update – A&A for CPAs

Technical stuff for CPAs providing attestation services

How’s this for a brazen money laundering scheme? We can add another item to the list of at least $16 billion of fines for money laundering.

with one comment

Image courtesy of DollarPhotoClub.com

Image courtesy of DollarPhotoClub.com

Check out this plan for evading money laundering rules. Oh, it came with a money back guarantee to clients whose money was being laundered. Also, I’ve accumulated a preliminary list of industry-wide fines for getting caught busting those AML rules.

11/26 – CNN – Barclays fined $109 million for trying to hide “the deal of the century” – Staff at Barclays came up with a creative plan to hide clients’ money. The staff processed US$2.8B of deposits from “politically exposed people”, meaning people with significant political power and ability to do bad stuff to generate personal wealth.

Commission for the bank was £52M (US$77M).

According to the article, this scheme involved merely performing an Internet search to verify the source of funds as asserted by the clients, did not enter clients’ names on the internal computer systems which meant compliance staff would never find out who owned the money, and used quickly opened & closed offshore accounts to move the money.

Most entertaining from a publicity perspective, the scheming staff purchased a new safe to store paper documents so nobody else in the bank could ever get to the documents.

All in all, seems to me the staff took extraordinary efforts to make sure compliance staff never tumbled to the deals. Those steps, in my opinion, are things one would do to hide money for clients.

So, to show the regulators were serious, they tripled the fine to $109M to demonstrate their seriousness. Fine was not enough to actually make a dent in the bottom line. I will discuss the fine in the next post.

As is the norm for banking fiascos, the article has zero indication of any individual enforcement actions.

11/27 – Wall Street Journal – Barclays Fined for Deal that Protected Clients’ Secrecy Article also points out the bank promised to refund £37.7M (US$56M) if the clients’ names are ever revealed.

The fee amount was surrendered according to the article. I’m not sure, but that seems to be in addition to the fine. I think that would make the hit to income about $109M plus $77M, or around $186M. Still, a pittance in the overall list of top rated banking fiascos.

Running tally of fines

Money laundering settlements keep popping up, so I guess I’ll start accumulating a list of fines I am aware of. My tally after first glance at my past posts.

PNB Paribas      8,973
 Credit Suisse      2,500
 HSBC      1,915
 Commerzbank      1,454
 Credit Agricole         787
 Standard Chartered         640
 Barclays         186
 running total    16,455

By my incomplete tally, that is over $16 billion of stockholder equity wasted away by laundering money.

My tally for money laundering ($16.5B), Forex ($12.4B), Libor ($9.0B), ISDAfix ($1.6B), and credit default swap settlements ($1.9B) shows about $40 billion of settlements with my wild guess of another $5 billion yet to be negotiated.

Written by Jim Ulvog

November 30, 2015, 8:02 am at 8:02 am

Posted in Other stuff

Tagged with ,

One Response

Subscribe to comments with RSS.

  1. […] post discussed Barclays drawing a £72M (US$109M) fine for breaking British anti-money laundering laws.  The bold scheme involved not putting clients’ […]


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: