FinCEN – Isn’t it time to start making arrests?

22nd September 2020 / United Kingdom
The Times story about Boris Johnson's chaotic life says much

By Rob Woodward: Have we not tired of their crimes? In 2008, the bank-led financial crisis led to Britain’s national debt increasing from 41 per cent of GDP in 2007 to 87 per cent in 2015. It led directly to a policy decision by George Osborne, backed by the Conservative government – called austerity. According to the British Medical Journal, the health and social care crisis that followed led to 120,000 people losing their lives up to 2015. And just like the disastrous handling of the Covid-19 pandemic this year, it was the over 60s and care home residents bearing the brunt back then.

The latest breathtaking financial scandal to emerge is named the FinCEN Files, so named as a leak of over 2,500 documents to the US Financial Crimes Enforcement Network. In it, investigators found 2,100 suspicious activity reports. A bank must fill in one of these reports if it is worried one of its clients might be up to no good. The report is sent to the US authorities – where they then do nothing at all and turn a blind eye. Basically, the banks are running a global money-laundering operation and various authorities around the world pretend to monitor their activities for criminal activity and look the other way. The banks are also supposed to stop the transaction, alert the authorities, who then seize the money – which almost none of them do.

Fergus Shiel from the International Consortium of Investigative Journalists (ICIJ) said the leaked files were an “insight into what banks know about the vast flows of dirty money across the globe”. This is something of an understatement when you consider this astonishing fact. According to the ICIJ, the $2trn in suspicious transactions identified within the documents represents less than 0.02% of the more than 12 million suspicious activity reports that financial institutions filed with FinCEN between 2011 and 2017. This equates to about 5,500 reports being generated every day, seven days a week for six years. The scale of it all is stunning.

But to be fair, the banks have been up to these antics for decades, especially British ones, along with the top three tax havens in the world – which also happen to be British.

Over recent years, smaller cases have littered the news. Money laundering operations have seen the likes of the Danish Danske Bank being caught laundering $229 billion, the UK’s Standard Chartered with $250billion and America’s Wachovia Bank cleaning $338 billion to name but a few of many. Then there was the London Libor scandal that is now thought to have affected £200trillion in loans and derivatives. The Panama Papers of 2016 exposed yet more $trillions of illegally offshored taxable cash stashed away in something like 225,000 shell companies. The 2014 Lux Leaks revealed illegall mass tax avoidance by hundreds of corporations and ended with the no-one going to prison except the whistleblower.

Martin Woods, former suspicious transactions investigator said of the FinCEN Files:


“Some of these people in those crisp white shirts in their sharp suits are feeding off the tragedy of people dying all over the world”


Alex Cobham, chief executive at Tax Justice Network, said: “First, the leaks show that the biggest financial market in the world has comprehensively failed to play its role in regulating cross-border flows of suspicious money. The USA ranks as the second most dangerous secrecy jurisdiction on our 2020 Financial Secrecy Index, largely for this reason – while demanding with menaces that others improve their transparency and cooperation, the United States typically refuses to provide any such cooperation to others. Many of the world’s major financial institutions have comprehensively failed to meet their own responsibilities, in the name of turning a profit – however dirty. Swift and robust action is needed, including potential criminal charges, or banks will simply continue to treat the prospects of being caught and fined as a simple cost of business.

In 2018 the Financial Times crowed that “Forty-seven bankers were sentenced to jail time for their role in the 2008 financial crisis, dispelling the myth that no one was held personally accountable for the financial sector’s catastrophic failures.” The trouble was, only one was jailed from the US where the biggest crimes took place and none from the UK. Half of those that were jailed were from Iceland – who comprehensively cleared up their criminal banking sector and then got their economy moving again without bailing their banks out. Spain and Ireland cleared up the other half – and that was it.

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It is here that the problem lies. “Potential criminal charges” is not nearly enough to deter these gangsters.

Public outrage rises when other stories emerge at the same time. Injustice and inequality are the two factors that destroy civil society and democracy in equal measure.

For instance, when thinking of these sharp-suited bankers quaffing Dom Perignon at fashionable overpriced restaurants at the public expense, consider Darren Head who was ill with hunger because his out-of-work benefits didn’t come through. He stole a sandwich, went to prison, that piled up debts and then became homeless when they threw him out of his cell. In this case, we can see the state has emphatically failed on both sides of the equation in facilitating both injustices.

But in other cases, you might find the justice system needed to show it meant business. Last May, Shaun McAviney was caught stealing a £5 sandwich from Tesco’s. And because he hadn’t the means to pay the £1,114 he owed to the courts for previous misdemeanours since 2017 – he was sent to prison. In the same month, Jeffery Luckhurst, 49, admitted driving while disqualified. He was sent to prison due to “record of previous offending”, banned from driving for a year and ordered to pay a £128 victim surcharge.

By contrast, in Britain, the banks have destabilised the social fabric of the country, which ended with populists turning up promising to fix all the ills that plague the very people who voted for them. Of course, populists are just as bad as the bankers. Boris Johnson is a class example. Johnson openly admitted on a live television interview that he was the biggest supporter of the bankers immediately after the financial crash and went on to tell the nation to “stop banker bashing”. He stuck up and roared for people who engineered the biggest financial crimes in a century – whilst letting homelessness soar.

How many tens of billions are owed to the British public by the banks and their criminal clients just as a new policy of austerity is to be delivered because of the pandemic? One estimate from Tax Research UK presents us with an answer – as at this time last year, the so-called ‘tax-gap’ (the amount unpaid to the treasury through fraud, offshoring and so on) was £90billion a year. This year, it will be even higher.

In the light of the pandemic, we are told there will be new taxes. We are told that well over 2 million workers will lose their livelihoods. We are told that poverty and homelessness beckon for those already on the brink. Soon, we will be told that public sector pay will be frozen again and that the state will be shrunk, that we can’t afford so many things such as social care, the NHS and so on.  And yet we know that the very resource we need right now, cash, is being stolen every second of every day from under our noses in gargantuan quantities, facilitated by those who are supposed to uphold the rule of law.

Are we not tired of their crimes that we all have to pay for yet?


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