Financial Crime World

Title: FinCEN Files Reveal Industrial-Scale Money Laundering in Mauritius: A Data Analysis

Mauritius at the Heart of Global Money Laundering Scandal

The FinCEN Files, a collection of financial intelligence reports leaked to the International Consortium of Investigative Journalists (ICIJ), shed light on a damning account of industrial-scale money laundering. Mauritius emerged as a focal point in this sordid tale.

ICJ’s data analysis showed how global banks and financial institutions overlooked their legal obligations to halt the flow of dirty money. Profit motives drove them, while a dysfunctional and U.S.-led enforcement system perpetuated this unbecoming status quo.

Financial Entities and Suspicious Reports

  • Nearly 90 financial entities filed over 2,100 ‘Suspicious Activity Reports’ (SARs) with the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) between 1999 and 2017.
  • Over 98% of these reports originated from 2011 to 2017, encompassing around 2.1 trillion dollars worth of transactions.
  • This amounted to only 0.02% of the 12 million SARs submitted by financial firms during this period.

The Complex Web of Financial Transactions

ICJ’s data analysis discovered that:

  • In half of these reports, banks lacked sufficient information about one or more parties.
  • In more than 680 reports, financial institutions requested more details but only received responses in 160 cases.
  • Companies based in secrecy jurisdictions, including Mauritius, were frequent recipients of cash flows from high-risk regions.

Particularly Noteworthy Institutions

The FinCEN Files contained reports from several prominent financial entities:

  • Deutsche Bank: 982 reports, accounting for 62% of the total suspicious transactions.
  • Bank of New York Mellon.
  • Standard Chartered.
  • JP Morgan Chase.
  • Barclays.
  • HSBC.

Essential Insights from Narrative Reports

Although most reports lacked transactional data, the narrative reports provided important insights into money flows. These reports:

  • Contained around 3 million words.
  • Showed evidence of significant reporting delays beyond the 30-day federal requirement to report suspicious transactions.

Transactions Linked to Allegations of Corruption and Sanctions Evasion

Transactions worth over $2 billion, linked to more than 20 companies and individuals in the FinCEN Files, were tied to allegations of corruption, fraud, embezzlement, or sanctions evasion.

The Flawed System: Profit Over Prevention

The FinCEN Files data analysis underscores the extent to which Mauritius and other secrecy jurisdictions have been used in industrial-scale money laundering. It reveals a deeply flawed system that puts profit over prevention and perpetuates a culture of ignorance.