DURBAN - The escalating probe into the banking industry has fingered one of the country’s biggest banks as being part of a vast network in which local financial institutions were involved in dodgy dealings.
The investigation showed that Standard Bank, one of the country’s leading lending institutions, was probably involved in unscrupulous transactions worth billions of dollars.
The report by the International Consortium of Investigative Journalists (ICIJ) implicated Standard Bank in the shadow dealings that have seen individuals and institutions losing hundreds of thousands of dollars.
Standard Bank was not immediately available for comment.
The US Financial Crimes Enforcement Network (FinCEN), a government agency operating to detect and prevent financial crimes, said about 173 potentially suspicious transactions had gone through the South African banks.
The report was contained in the report by the ICIJ, showing an amount of $482758 (about R8m) received through the banks and $60.27million sent out were flagged as potentially suspicious transactions.
Overall, the report identified more than $2trillion of transactions between 1999 and 2017 that were flagged by internal compliance departments of financial institutions as possible money laundering or other criminal activity.
The report stated that Standard Bank reported 169 of the 173 transactions that were highlighted in the report.
FinCEN said in a statement on its website at the beginning of the month that it was aware that media outlets intended to publish a series of articles based on unlawfully disclosed Suspicious Activity Reports (SARs) as well as other documents, and said that the “unauthorised disclosure of SARs is a crime that can impact the national security of the US.”
FinCEN is in charge of compiling “suspicious-activity reports” sent to it by banks that suspect financial wrongdoing by their clients and SARs do not constitute evidence of wrongdoing but are a way to alert regulators and law enforcement.
The FinCEN files showed that five banks: JPMorgan, Standard Chartered, Deutsche Bank, Barclays and BNY Mellon handled the most illicit funds between 1997 and 2017. However, the banks have sent these files to the US authorities to raise concern about what their clients were doing.
Stephen Meintjes, the head of research at Momentum Securities, said the ICIJ report explained the harmful effects on the lives of many that the laundering of dirty money exchanging hands across the globe.
“It seems, however, to be old news as far as the banks mentioned above are concerned. This is because the ICIJ report is largely based on leaked documents from the US Department of Treasury’s Financial Crimes Enforcement Unit which covered 2 100 transactions worth $2 trillion between 1999 and 2017.
“The documents contain reports by banks and other financial entities on transactions that might have involved illegally sourced funds and do not necessarily mean that those reporting were guilty of any crime,” Meintjes said.
It is alleged that between 1999 and 2017, $1.3trln was flagged to have passed through Deutsche Bank, broadcaster Deutsche Welle reported.
Standard Bank Group shares closed 0.42 percent lower at R103.46 on the JSE yesterday.
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