Kazakhstan’s Financial Institution Security Breach Exposed: Thousands of Suspicious Transactions Flagged Through US Banks

A shocking investigation has revealed that hundreds of millions of dollars in suspicious origin have flowed through Kazakhstan with the help of US banks, according to thousands of leaked documents. The International Consortium of Investigative Journalists (ICIJ) and BuzzFeed News uncovered a massive financial security breach involving top US banks.

The Investigation

The Financial Crimes Enforcement Network (FinCEN), created by the US Treasury Department in 1990 to combat domestic and international money laundering, had collected millions of suspicious activity reports (SARs) over an 18-year period. However, despite these warnings, FinCEN had no power to stop the transactions.

Notable Cases

• Viktor Khrapunov: A former oligarch close to Kazakhstan’s ex-president Nursultan Nazarbayev, who allegedly defrauded Almaty city through opaque public tenders before fleeing to Switzerland. Documents reveal that Bank of America, Citibank, and JPMorgan Chase processed millions of dollars in transactions for Khrapunov’s family, even after Interpol issued a Red Notice for his arrest.
• Mukhtar Ablyazov: A former banker and major political opposition figure, who saw $666 million flagged with SARs in his name. Ablyazov was involved in several scandals, including embezzlement in Kazakhstan, money laundering in the US, and extraordinary rendition from Italy.

The FinCEN Files

The documents suggest that many of these transactions were processed through The Bank of New York Mellon, which is also responsible for managing Kazakhstan’s national fund. Other financial institutions implicated include:

• Deutsche Bank: Already embroiled in past money laundering scandals, failed to stop the flow of dirty money despite knowing the potential risks.
• Other Financial Institutions: Ignored warnings and continued to process suspicious transactions.

The Scale of the Problem

Between 1999 and 2017, around $2 trillion was flagged as potentially linked to money laundering, terrorist financing, or other financial crimes. Western banks were aware that they were facilitating dirty money flows but chose to keep collecting fees rather than stopping the transactions.

Expert Analysis

Experts argue that Central Asian elites rely on Western institutions to supply them with tools for circumventing laws and public scrutiny in order to satisfy demand for corruption and tax havens. The FinCEN Files expose the extent to which these financial institutions have enabled this corruption, further eroding trust in the global financial system.

Conclusion

The investigation reveals a significant breach of financial security, highlighting the need for stricter regulations and oversight to prevent such incidents in the future. It also underscores the importance of transparency and accountability in the global financial system.