British bank Standard Chartered has been accused by a whistleblower of allowing transactions to terrorist organisations and covering up the evidence with the help of the US government, according to a report by BBC News.
Julian Knight, a former executive at Standard Chartered, has accused the US government of ignoring or concealing evidence that the bank continued to conduct transactions with sanctioned Iranian entities and terror groups after he raised the issue with authorities.
The bank avoided prosecution for similar charges in 2012 after the UK government intervened with an investigation being carried out by the US Justice Department at the time. But a new case has now been filed in New York, alleging thousands of illegal transactions were carried out by the bank between 2008 and 2013 in breach of sanctions against Iran and amounting to more than US$100bn.
According to the report, an independent expert tasked with analysing transaction data from the period in question has also identified “US$9.6bn of foreign exchange transactions with individuals and companies designated by the US government as funding ‘terror groups’, including Hezbollah, Hamas, al-Qaeda and the Taliban.”
In 2012, Standard Chartered was publicly accused of falsifying Swift transaction data so that it could transfer billions of dollars on behalf of sanctioned entities via its New York branch. But George Osbourne, who was the UK Chancellor at the time, intervened in the case and US authorities chose not to prosecute.
The bank has previously admitted – and been fined for – making transactions on behalf of sanctioned entities. However, after further analysis, it has now been revealed that the bank may also have made payments on behalf of terrorist organisations.
These transactions were hidden in confidential spreadsheets first leaked to US authorities in 2012 by two whistleblowers, including Knight.
They have been brought to light by David Scantling, an expert with decades of experience in counter-terrorist financing. In a court filing made last week, Scantling stated that the spreadsheets contain records of over half a million separate transactions from 2008 to 2013. The transactions were “cloaked,” meaning they were not immediately visible, but could be extracted using a special technique.
Scantling’s court declaration claims that among the records are several transactions by Standard Chartered “with or on behalf of Iranian banks, Iranian companies and Middle Eastern money exchanges that, according to [the US government], finance designated foreign terrorist organisations”.
in his case, Knight claims that the US government committed a “colossal fraud” by denying he had provided “damning evidence” indicating the bank had “facilitated many billions of dollars in banking transactions for Iran, numerous international terror groups, and the front companies for those groups.” Knight is challenging a decision made by the court in 2019 to dismiss his whistleblower complaint against Standard Chartered, and is looking to force the government to disclose all evidence the court used to dismiss his case.
Standard Chartered told the BBC it was “confident the courts will reject these claims“, and that US authorities had previously determined that the claims were “meritless” and “did not show any violations of US sanctions.”
