A major British bank, using its New York operations, “schemed” with the Iranian government for nearly a decade to launder $250 billion, exposing the United States financial system to terrorist entities, drug traffickers and corrupt regimes, New York’s top banking regulator charged on Monday.
The New York State Department of Financial Services (DFS) accused Standard Chartered, which the agency called a “rogue institution,” of hiding more than 60,000 transactions for Iranian banks and corporations, motivated by the millions of dollars it reaped in fees, The New York Times reported.
The bank’s senior management used the New York branch “as a front for prohibited dealings with Iran — dealings that indisputably helped sustain a global threat to peace and stability,” according to a regulatory order sent to the bank.
The order requires the bank to explain the apparent violations of law in a hearing later this month and justify why its New York license should not be revoked.
The bank said Monday night that it “strongly rejects the position and portrayal of facts” by the agency.
Standard Chartered officials debated whether to continue Iranian dealings and in October 2006, the top official for business in the Americas warned in a "panicked message" that the Iranian dealings could cause "catastrophic reputational damage" and "serious criminal liability,” Reuters reported.
According to the order, the response was hostile saying, “Who are you to tell us, the rest of the world, that we’re not going to deal with Iranians.” The department of financial services, led by superintendent Benjamin M. Lawsky, said it was “impossible to know” how much of the money might have been used by Iran to finance its nuclear program or to support terrorist organizations.
The “apparent fraudulent and deceptive conduct” by Standard Chartered occurred from 2001 to 2010, the order said, and was particularly “egregious,” because some of the transactions were being processed even as the bank was under formal oversight by New York banking regulators from 2004 to 2007, The Times reported.
In a statement, Standard Chartered said the bank "does not believe the order issued by the DFS presents a full and accurate picture of the facts."
The accusations against Standard Chartered come as the United States officials attempts to crack down on the flow of money to foreign countries, companies and individuals connected to terrorism, weapons of mass destruction and drug trafficking.