How Treasury Justified a $13 Million Smaller SCB Settlement than NYS

Back in August, Standard Chartered Bank settled with New York’s Superintendent of Financial Services for laundering Iran and other sanctioned countries’ money; that settlement was for $340 million.

Today, Treasury announced its settlement for the same fraud. Today’s settlement–which includes “U.S. Attorney’s Office for the District of Columbia, the Department of Justice’s National Security Division, the Department of Justice’s Asset Forfeiture and Money Laundering Section and the New York County District Attorney’s Office; as well as orders involving the Board of Governors with the cooperation of the UK’s Financial Services Authority,”–is for $327 million, of which Treasury’s take is $132 million.

When SCB settled with SFS, it admitted that its fraud had covered $250 billion in transactions (thus refuting the dubious work done by Promotory Financial).

The New York State Department of Financial Services (“DFS”) and Standard Chartered Bank (“Bank”) have reached an agreement to settle the matters raised in the DFS Order dated August 6, 2012. The parties have agreed that the conduct at issue involved transactions of at least $250 billion. [my emphasis]

But today’s Treasury settlement shrinks that claim this way:

While SCB’s omission of information affected approximately 60,000 transactions related to Iran totaling $250 billion, the vast majority of these transactions do not appear to have been violations of the Iranian Transaction Regulations, 31 C.F.R. Part 560 due to authorizations and exemptions which were in place at the time.

Treasury would have us believe that SCB engaged in fraud to hide Iran’s involvement of money transfers even with legitimate transfers.

Maybe that’s right. Without a lot more transparency, we’ll just have to take Treasury’s word for the claim that the vast majority of money Iran was transferring up to 2008 didn’t fall under sanctions in place at the time, as dubious as that is.

Now, none of this addresses the scope of the violations involving other sanctioned countries, such as the $96 million transfered to Sudan described in the Treasury settlement but not the SFS one. Nor does it address the $243,500 it transfered for a designated drug kingpin, Connect Telecom, in 2011, after SCB had already started discussing these issues with “certain law enforcement agencies” and NYS.

It also relies on this claim:

OFAC had not issued a penalty notice of Finding of Violation against SCB in the five years preceding the apparent violations.

To make SCB look compliant, even though the Fed had been in discussions with SCB about these violations starting in 2004.

And of course, it includes this language:

Without this Agreement constituting an admission or denial by SCB of any allegation made or implied by OFAC in connection with this matter…

In spite of SCB’s earlier admissions to SFS.

Again, SCB has already admitted to some of this fraud. But Treasury has gone out of its way to not only not require an admission, but to retroactively label hundreds of billions of dollars in fraudulent transactions kosher.

It’s really time to start asking why that is.

Tweet about this on Twitter5Share on Reddit0Share on Facebook6Google+0Email to someone

2 Responses to How Treasury Justified a $13 Million Smaller SCB Settlement than NYS

  • 1
  • 2

Emptywheel Twitterverse
bmaz @ShamelessLib @jadler1969 @rickhasen I support provision of actual healthcare by the govt, not a subsidization of carriers. #MedicareForAll
2mreplyretweetfavorite
JimWhiteGNV RT @NatSecCNN: Delta Airlines says it has suspended flights between New York and Tel Aviv, Israel, because of security concerns in Tel Aviv.
3mreplyretweetfavorite
bmaz @ShamelessLib @jadler1969 @rickhasen Yes, I always thought the ACA was a poorly and cravenly constructed pile of garbage.
3mreplyretweetfavorite
JimWhiteGNV RT @flightradar24: Delta Air Lines DL 468 from New York to Tel Aviv diverts to Paris after Delta decided to cancel all Tel Aviv flights htt…
3mreplyretweetfavorite
bmaz @armandodkos @BlanksSlate Will get reversed en banc.
4mreplyretweetfavorite
bmaz @armandodkos @BlanksSlate No in that it screws up coverages; but it was an incredibly poorly constructed law, and I support legal process.
4mreplyretweetfavorite
bmaz @ShamelessLib @jadler1969 @rickhasen This is bullshit. The law and process are more important, irrespective of final decision, than individs
7mreplyretweetfavorite
bmaz It's only "partisan" when it goes against your pet political position RT @BlanksSlate Happy Insufferable Partisan Twitter Day!
9mreplyretweetfavorite
bmaz @emptywheel @onekade @ggreenwald @barryeisler @Max_Fisher Gifs are annoying. Whoever created them should be shot on sight.
10mreplyretweetfavorite
bmaz RT @MonikaBauerlein: Here's @smencimer's Halbig backgrounder. Lead plaintiff is a Bush-era HHS officlal. http://t.co/SoDxoN3dsf
12mreplyretweetfavorite
bmaz @sbagen @jadler1969 @rickhasen @mfcannon Props where due, even if they may be temporary.
17mreplyretweetfavorite
December 2012
S M T W T F S
« Nov   Jan »
 1
2345678
9101112131415
16171819202122
23242526272829
3031