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FinCrime Agent
AML Case Studies: Real Red Flags That Triggered Investigations
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The provided information discusses real red flags in anti-money laundering (AML) cases that led to investigations and significant consequences for financial institutions. Three case studies are highlighted: Danske Bank's Estonian branch processing suspicious transactions, HSBC's money laundering scandal in Mexico, and the FinCEN Files leak revealing major banks processing suspicious transactions despite flagging them. These cases emphasize the importance of recognizing red flags, taking appropriate action, and the need for effective response mechanisms in AML compliance.
Transkrypcja wygenerowana przez Skrybot
what does a real red flags looks like in aml not in theory not in a training manual i'm talking about the kind of red flag that sparks an actual investigation exposes billion in dirty money or forces a bank to overhaul its entire compliance structure in this video we are diving into three real case studies and the red flags that triggered them so let's jump right into today's video In anti-money launching we all talk about red flags but very often in practice it's easy to ignore them when they pop up in routine reviews and yet in every major financial crime scandal the warning signs were there sometimes years before anyone started to act and that's why today we are not just listing generic red flags we are looking at specific ones that triggered real investigation and changed the industry.
Whether you're new to AML or a seasoned professional, these stories hold a lesson for all of us. If you're serious about growing in this space, check out my FinCram Career Accelerator. It's an online course built for aspiring AML professionals and career changers. It's packed with practical case-based lessons, job strategy tips, and access to a private Telegram community. You will find the link in the video description or head to fincramagent.
com slash course and now let's get into the real world stuff let's start with danske bank specifically its estonian branch between 2007 and 2015 that single branch processed over 200 billion euros in suspicious non-resident transactions and that's not a typo the red flags client were shell companies from high-risk jurisdictions mostly russia azerbaijan and moldova source of wealth was often vague or clearly fabricated massive flow of funds moved daily with no legitimate business explanation another red flag was staff raised concern internally including whistleblower howard wilkinson but they were ignored or sidelined the danish fsa and Estonian regulators both admitted they failed to act fast enough. Danske later shut down operations in Estonia, faced multiple probes across Europe and the US, and saw several top executives resign.
So this case, as we know, reshaped the way we looked at non-resident client risk, cross-border monitoring, and corporate accountability in antimon laundering. Let's now rewind to 2012 and the HSBC money laundering scandal. Followed a detailed investigation by the US Senate, HSBC agreed to a US$1. 9 billion fine for failing to prevent money laundering, particularly through its Mexican operations. And the red flag in this case were structuring of cash deposits just under reporting threshold, day after day, across. . . branches. Transfers from share companies with no commercial activity into US accounts. Another red flag was the compliance staff flagged this risk, but senior management prioritized revenue and often dismissed warnings. A US Senate report described HSBC AML systems of that time as woefully inadequate.
In fact, HSBC continued serving clients even after internal alerts were raised. This was done by simply rerouting the activities through other legal entities. As you know, this case sparked a global wave of de-risking and compliance overalls, especially in correspondent banking and in high-cash businesses. In 2020, the FinCEN File Slick hit. headlines worldwide. Over 2,000 suspicious activity reports were leaked to BuzzFeed News and investigated by the ICIG, showing that major banks were flagging suspicious transactions, but still processing them anyway. Some of the key revelations included J. P. Morgan moved over $1 billion for a client that was tied to the 1MDB scandal even after internal alerts. Deutsche Bank processed suspicious files for mirror trading schemes despite multiple SARs.
HSBC allowed a non-Ponzi scheme to move funds even after submitting SARs about the very same client. And the FinCEN file exposed a critical industry flaw. Filing a SAR doesn't equal risk mitigation if the transaction flow never stops. It was a wake-up call about the gap between detection and action. and a reminder that escalation procedure can just be as important as monitoring too. Let's sum it up. AML isn't just about flagging risk, it's about understanding what the red flag actually means and making sure the right action follows. Each of these cases that we've seen today, Danske, HSBC, the FinCEN file had alerts. What failed was the response.
Whether you are in KYC transaction monitoring or in the FAU team, what matters most is asking the right questions and pushing when something doesn't add up. Which red flag stood out most to you? Have you seen similar patterns in your own risk? Drop your thoughts in the comments of this video. I read and answer to every of your comments. And remember, if you want to deepen your practical knowledge, check out the FinCREM CAREER ACCELERATOR. The link is in the video description. don't forget to like and subscribe to my channel and press the bell if you want to be notified when new videos are going live and that's all for today thank you for watching and until next time see you soon.
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