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16

World’s Biggest Money Laundering Investigation

World’s Biggest Money Laundering Investigation Goes Up Another Gear

Malaysia could find fame for triggering a new, more effective level of regulatory cooperation between the financial centres of the world – one positive development from landing at the centre of the world’s biggest money-laundering investigation.

Today’s events have been an indicator of how closely investigators are working to trace the US$7 billion, which Malaysia’s Auditor General now calculates to have gone missing from the 1MDB development fund into a network of obscure off-shore “treasure island” companies, before emerging once again in the bank accounts and asset portfolios of politically connected Malaysians.

First, the Singapore monetary authority (MAS) announced they were closing the Singapore branch of the Swiss BSI Bank, after launching criminal investigations against six of its senior managers for ‘serious breaches of anti-money laundering requirements’:

“The Monetary Authority of Singapore (MAS) announced today that it has served BSI Bank Limited (BSI Bank) notice of intention to withdraw its status as a merchant bank in Singapore for serious breaches of anti-money laundering requirements, poor management oversight of the bank’s operations, and gross misconduct by some of the bank’s staff.

In addition, MAS has referred to the Public Prosecutor the names of six members of BSI Bank’s senior management and staff to evaluate whether they have committed criminal offences.” [MAS statement]

In addition, this statement articulated that “MAS is working closely with the Swiss Financial Market Supervisory Authority (FINMA), the home regulator of BSI SA, to oversee an orderly closure of BSI Bank in Singapore”.

So little surprise when media inboxes were then graced with further statements from the Swiss Attorney General’s Office to confirm that he also has launched a criminal investigation against BSI in its headquarters of Lugarno over the same offences:

“Bern. The Office of the Attorney General of Switzerland (OAG) has opened criminal proceedings against the BSI SA bank. The decision to open proceedings is based on information revealed by the criminal proceedings in the 1MDB case and on issues raised in the FINMA decision of 23 May 2016. The OAG suspects deficiencies in the internal organisation of the BSI SA bank. It is believed that due to these deficiencies, the bank was unable to prevent the commission of offences currently under investigation in the criminal proceedings relating to 1MDB.”

To re-enforce the point the Swiss financial regulator FINMA released its own devastating statement:

“BSI in serious breach of money laundering regulations
Through business relationships and transactions linked to the corruption scandals surrounding the Malaysian sovereign wealth fund 1MDB, BSI AG committed serious breaches of money laundering regulations and “fit and proper” requirements. This is the outcome of enforcement proceedings launched by the Swiss Financial Market Supervisory Authority FINMA. In the case of 1MDB, the bank executed numerous large transactions with unclear purpose over a period of several years and, despite clearly suspicious indications, did not clarify the background to these transactions. Among other measures, FINMA has ordered the disgorgement of profits amounting to CHF 95 million. FINMA has also launched enforcement proceedings against two of the bank’s former top managers” [see full statement]

The development has come at a nightmare time for the bank, just as its present owners are trying to sell on the scandal torn entity to another of Switzerland’s major banking institutions. Negotiators have been frantically trying to ring fence this “dirty part” of the bank as the transfer takes place and both regulators have indicated a willingness to assist in the process.

…more
World’s Biggest Money Laundering Investigation Goes Up Another Gear
24 May 2016 – SR

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