The U.S. unit of a British bank “schemed” with Iran’s government to hide at least $250 billion in transactions that may have been used to finance terrorism and Iran’s nuclear ambitions, regulators charged on Monday.
Over almost a decade, Standard Chartered Bank in midtown Manhattan concealed about 60,000 transactions by Iranian clients from U.S. authorities in order to rake in millions of dollars in fees, New York’s Department of Financial Services said.
Bank executives, “motivated by greed,” were fully aware they were flouting the rules between 2001 and 2010, Benjamin Lawsky, the department’s superintendent said.
In 2006, an employee in the New York branch complained to superiors that the bank’s Iran dealings might make it criminally liable.
“You f—— Americans,” was reportedly the response from a senior official in London. “Who are you to tell us, the rest of the world, that we’re not going to deal with Iranians.”
The bank acted as a “rogue institution,” and its actions “left the U.S. financial system vulnerable to terrorists, weapons dealers, drug kingpins and corrupt regimes,” Lawsky said.
The New York regulator threatened to revoke Standard’s U.S. banking license and demanded it hire an independent monitor.
Standard Chartered said it rejected the agency’s view of the facts, saying that “well over 99.9% of the transactions relating to Iran complied” with U.S. sanctions and regulations. Less than $14 million did not, it said.
It also said no payments were made on behalf of groups designated by the U.S. as terrorist organizations.
The U.S. government keeps close tabs on transactions with financial institutions in sanctioned countries and bans nearly all in Iran’s case.
Bank employees routinely stripped out legally required information identifying their Iranian clients to evade U.S. scrutiny and speed up the transactions, Lawsky said.
Management even put the practice in its operating manuals, referring to it as a “repair,” the watchdog said.