U.K.'s Standard Chartered Bank "strongly rejects" Iran money laundering claims by U.S.
A man walks past the Standard Chartered Bank building in Hong Kong, Oct. 13, 2010. / AP
(AP) ALBANY, N.Y. A British bank schemed with the Iranian government to launder $250 billion from 2001 to 2007, leaving the United States' financial system "vulnerable to terrorists," New York's financial regulator charged Monday.
In a statement released Monday night, Standard Chartered Bank said it "strongly rejects" and "contests" the New York regulators' portrayal of its transactions with Iranian banks. It said it voluntarily began reviewing the transactions since 2010 with U.S. regulators and the findings don't match the accusations leveled at the bank Monday.
State Financial Services Superintendent Benjamin Lawsky signed an order that requires London-based Standard Chartered Bank to answer his questions following an investigation into "wire stripping," the practice of removing crucial identifiers in financial transactions.
The state agency called the bank a rogue institution and quoted one of its executives as saying: "You (expletive) Americans. Who are you to tell us, the rest of the world, that we're not going to deal with Iranians."
The bank conspired with its Iranian clients to route nearly 60,000 different U.S. dollar payments through Standard Chartered's New York branch "after first stripping information from wire transfer messages used to identify sanctioned countries, individuals and entities," according to agency's order.
The order said the transactions provided the bank with millions of dollars in fees at a time when such trade was restricted.
"The group does not believe the order issued by the DFS presents a full and accurate picture of the facts," the bank said Monday night in a fuller response to Lawsky's order. "The analysis, that the group shared with all the U.S. agencies, demonstrates that throughout the period the group acted to comply, and overwhelmingly did comply, with U.S. sanctions and the regulations."
The statement said "well over 99.9 percent" of the questioned transactions with Iran complied with all regulations. The few transactions that didn't amounted to just $14 million, according to the bank. The bank said none of its Iranian payments was on behalf of any designated terrorist group.
"The group takes its responsibilities very seriously, and seeks to comply at all times with the relevant laws and regulations," the bank stated. "It is in this spirit we initiated this review and have engaged with the U.S. agencies."
The bank also said it had no prior notice of the order.
A government official said Monday that the FBI's New York office has been investigating the matter to determine if criminal charges should be brought. The official wasn't authorized to discuss the probe and spoke to The Associated Press on condition of anonymity.
An FBI spokesman declined to comment.
The state agency said the bank's actions "left the U.S. financial system vulnerable to terrorists, weapons dealers, drug kingpins and corrupt regimes and deprived law enforcement investigators of crucial information used to track all manner of criminal activity."
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