Monday, September 20, 2021

10 Most Shocking Money Laundry Cases In History- From Al Capone to Wachovia

For most people, when they hear the word ‘money laundering’, visuals of newspaper clippings and thriller movies come to mind. Well, as thrilling as these visuals might be, cases of money laundering can be quite gruesome and complicated. We have heard of infamous cases of money laundry that came from some of the most trusted organizations and people like Danske Bank and Wachovia.

It might sound fascinating, however, the process of washing the black money to turn it into legal wealth is actually a practice that is illegal and under the strict surveillance of regulatory authorities for 365 days. If you are caught guilty in the case of money laundering, you can land in prison for upto twenty years along with a fine of $500,000 or more, depending upon the intensity of your crime.

ALSO READ: What is Money Laundering and how does it work?

We have prepared a list of the 10 of the most thrilling and high-profile cases of money laundering throughout the recent course of history for you to binge on!

10 Most Talked About Cases of Money Laundry in History– From Wachovia to Al Capone

1. The Danske Bank Case

One of the most recent scandals on our list which made international headlines was the Danske Bank scandal. Labeled as ‘the biggest scam in Europe’s history, it spans back to 2007 when the bank’s Estonian branch came under heavy scrutiny from the Estonian government and the Russian Central Bank for allegedly facilitating large transactions on behalf of the Danske Bank.

Although the bank was under heavy fire, the allegations died down. It was later found that the branch was being used to carry out illicit transactions worth over $228 billion during the periods that followed up till 2015.

2. The Wachovia Bank Scam

The scandal of Wachovia Bank is undoubtedly one of the most sensational cases of money laundry in the world. Before being purchased by Wells Fargo during the 2008 crisis, Wachovia was one of the leading banks in the United States. The problem began in 2006 when the bank allowed Mexican drug cartels to launder huge sums through its tranches.

As cartels generated millions through drug sales in the US, the same was converted into Mexican currency and wired back to the Wachovia bank. The banks’ inefficient system failed to keep track of the origin of these funds and close to $380 billion was circulated across the border between this period before eventually getting busted.

3. The HSBC Case

Regarded as one of the most reliable banks across the globe, HSBC found itself in deep waters back in 2012 as it was fined for having inefficient operations that lead to laundering of over $8 billion in the span of 7 years. This was made possible as large sums of money were being circumvented internationally even in blacklisted countries like North Korea and Iran. Stringent alterations were made to the organizational structures and policies after the money laundering case was busted.

4. The Al Capone Story

Al Capone, a Chicago gangster, is arguably one of the most famous money launderers in the history of American deceits. Eventually convicted of tax evasion, Al Capone managed to launder roughly about $1 billion through various fronts. While also perpetrating violence throughout the city of Chicago, Al Capone became one of the most wanted gangsters in America.

The fact that the term “money laundering” was the originated after Al Capone’s case caught the light, itself says about the intensity of this case. The American gangster and his mates were charged under 22 cases of federal tax evasion between 1925-29.

5. UK’s Visa Fraud

In 2019, the United Kingdom reported its largest-ever money laundry case wherein imposters posed as immigration advisors to deceive officials of the home affairs office. For people seeking immigration to the UK, one of the key requisites is to complete their applications through an online portal to minimize the chances of being defrauded. This privilege was, however, not extendible back when fraudsters charged extortionate fees for processing immigration applications. Eventually, the scheme went bust, saving taxpayers millions of dollars.

6. The Bank of Credit and Commerce International Scam

Yet another major banking institution that indulged in money laundering was BCCI, founded by Pakistani businessman Agha Hassan Abedi. The globally recognized bank operated primarily out of the United Kingdom and started to grow rapidly by the end of the 20th century. By 1990, an investigation revealed multiple false transactions in the books of BCCI which brought about further revelations. The now-defunct bank siphoned money to the tune of $23 billion through multiple unrecorded transactions which were eventually brought to light by regulatory authorities.

7. Case of Standard Chartered Bank

The history of Standard Chartered bank can also provide for numerous instances of money laundering with the most recent one being in 2019. Prior to this period, the bank constantly failed to implement the AML (Anti Money Laundering) practices and ignored certain regulatory sanctions against countries like Iran, Sudan, Syria, and Zimbabwe which attracted the interest of the Federal Reserve. A cease and desist order was issued against the bank and the audit authorities found serious shortcomings with respect to customer due diligence. The bank was fined a total of $1.1 billion for its unethical practices. 

8. The Nauru Tax Haven

Once regarded as a tax haven nation, Nauru was flooded with shell banks which helped the Russian mafia launder a total of $70 billion over a stretched period up till 1998. The government was highly flexible and let its shell banks operate without requisite internal scrutiny which further encouraged the inflow of funds to the island country. Even organizations like Al Qaeda started taking interest and soon jumped onto the scene.

By 2005, Nauru managed to pass the Anti Money Laundering and tax laws preventing circumvention of illicit funds.

9. Bank of Scotland Scandal

Dubbed by many as the ‘rogue employee scandal’, Bank of Scotland’s Reading branch was the epicenter of this scam. The branch defrauded the bank of over $200 million through undisclosed transactions between 2003 and 2007 and was consequently fined $40 million. 

Often the trusted names, especially the esteemed banks, have emerged as the leading culprits of dirty money. Like Wachovia, Bank of Scotland is another example of the similar breach of trust.

10. The Liberty Reserve

Considered as the predecessor to the headline-making cryptocurrency Bitcoin, the Liberty Reserve was an incorporated company that issued digital currency globally. Its founder, Arthur Budovsky was sentenced to prison after regulators caught him in the midst of a huge money-laundering operation that involved computer hacking, credit card, and identity theft. The Liberty Reserve grossed transactions having a combined worth of $8 billion before ultimately being shut down by the U.S government. 

Siddharth Kulkarni
Siddharth is an incoming FMV Analyst and B.Com Hons graduate from Delhi University. Siddharth holds several positions of authority at a college level at various societies namely The Young Entrepreneurs Society and The Hult Prize. He is an enterprising youngster who is passionate about learning and growing as a person with each successive day. He is a hardworking and self-confident individual who possesses zeal and grit and loves to work with details. Being a sportsperson as well as an academic achiever, he love to surround himself with healthy competition.






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