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.

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

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Emptywheel Twitterverse
bmaz @Honeygirl_Music Hey, it's not me, but Scotty gonna have to talk Liz into showing up. She runs this show here. I am just a passenger....
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emptywheel @nickmanes1 Yep, something like that. Back to my turnout point. @vandebum
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emptywheel @nickmanes1 And unless my #s are fucked, more people voted today than in 2011 mayoral. @vandebum @VanAndelArena
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emptywheel @nickmanes1 Sort of what I'm saying: turnout sucked, actual win total for Bliss not far behind Heartwell '11 @vandebum @VanAndelArena
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emptywheel @nickmanes1 My VERY rough numbers based on GRP's numbers is 21,000 (Bliss' 36% margin = 7,000) @vandebum @VanAndelArena
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emptywheel @vandebum Technically, didn't more people vote than capacity of @VanAndelArena (tho not by all that much)?
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emptywheel @nickmanes1 Did you at least have Gita Pita to reward yourself?
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emptywheel I hope someone will correct my numbers, but Heartwell won, in November 2011, w/14,131 votes. Bliss won today, in August primary, w/~13,200?
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emptywheel @sbagen Mayoral election in 2011 (in November) had fewer than 18,000 votes cast.
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emptywheel @sbagen So 23,300 people said they wanted this election, 21,000 than that participated in it.
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emptywheel .@sbagen The term limits referendum last Nov which created this election (even year, regular election day) had fewer than 50,000 voters.
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emptywheel @sbagen It was a primary qua general tho. Hard to argue 66% in primary doesn't merit general win.
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