BNP Paribas Fined $8.9 Billion for Illegal Money Deals

1 Comment » Written on July 3rd, 2014 by
Categories: Frauds

A brilliant story by Jessica Silver-Greenberg and Ben Protess at the NYT, on how a grieving father of a daughter who died in a suicide bombing attack in Gaza, helped bring BNP Paribas to justice for helping with the financing of terror.

BNP ultimately admitted to guilt - of helping Sudan and Iran transfer money to entities in America, by hiding the true transactors of the money so they wouldn’t get dinged for it. They’re paying nearly $9 billion as a fine.

The father, who blamed Iran for financing the bombing, won a case and wanted to collect from a charity he said was funded by Iran. The charity owned a building on New York. The money trail led them to Credit Suisse and Lloyds, who had replaced the names of the Iranian government with their own. (Dealing with Iran is prohibited in the U.S.)

Credit Suisse, Lloyds, Barclays, ING, StanChart and HSBC all were part of the same game. They gave in, and settled. It’s incredible how just the paying of a fine has absolved each of them.

And then an informant told investigators that the biggest fish in this sea was BNP. They found tens of billions of dollars transacted through BNP, which has since realized that the best way is to say sorry and pay a hefty fine and get on with it.

I sometimes wonder what would happen if they found a bank in India doing this. RBI would probably send them a “strong note” of disapproval and everything would go on as usual. Our investigation of such financial crimes leaves a lot to be desired. Look at the NSEL case, where their only saving grace is that they’ve managed to keep Jignesh Shah in jail without having convicted him, because they’re still looking for enough evidence.

It’s not about speed. Even the BNP case took nearly 8 years to unravel. It’s about the fact that eventually, justice was done. And that, in India, would be welcome.

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About the Author:
http://www.capitalmind.in
The man behind Capital Mind. Deepak is a co-founder at MarketVision, a financial knowledge company. Deepak also provides data research and consulting services, and now lives in Bangalore. Connect with him at deepakshenoy@gmail.com.

One Response to “BNP Paribas Fined $8.9 Billion for Illegal Money Deals”

Good article Deepak. I liked your conclusion statement indicating what happens if an bank in India is involved. I feel while hefty penalty may not be imposed by RBI, however if done, people would loose trust among banks for investments.


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