Recent documents submitted to a U.S. federal court allege that major British bank Standard Chartered helped finance sanctioned Iranian entities and terrorist groups, and that relevant evidence was ignored by American authorities.
London-based Standard Chartered, which primarily serves clients in emerging markets, was previously punished with more than a combined $1.7 billion in fines after admitting in 2012 and 2019 to violating sanctions on Iran and other blacklisted countries.
The bank denies that it ran transactions for any organizations designated as terrorists.
The latest court filings, provided by former Standard Chartered Bank (SCB) employee turned whistleblower Julian Knight, claim that U.S. officials lied by denying that he provided them with evidence of far greater wrongdoing by the bank. The officials then applied to dismiss his whistleblower case against the bank as “meritless” in 2019 in order to shield it, Knight alleged. He has now asked a U.S. federal court in New York to reinstate the case.
Knight, who led a Standard Chartered transaction services unit between 2009 and 2011, was one of two whistleblowers who gave U.S. investigators confidential bank statements in 2012 and 2013. The statements documenting transactions that he says contained proof of further sanctions breaches, including violations beyond 2007, when the bank said it had stopped any dealings with Iran.
Knight’s court filing alleges that the U.S. government committed a “colossal fraud” against the legal system by denying he had presented “damning evidence” that Standard Chartered “facilitated many billions of dollars in banking transactions for Iran, numerous international terror groups, and the front companies for those groups,” according to a report by the International Consortium of Investigative Journalists.
Some of that evidence, the court filing says, showed that the bank’s clients included front companies for Iran’s Islamic Revolutionary Guard Corps, Palestinian militant group Hamas, Lebanon’s Hezbollah, and Iran-linked entities in the United Arab Emirates, Kuwait, Germany and other countries.
The two whistleblowers alleged that U.S. authorities who investigated Standard Chartered “made false statements to a court in order to have their [Knight’s and his colleague’s] claim for a whistleblower’s reward dismissed” in 2019, the BBC reported.
The authorities in question, including an FBI agent, said that the whistleblowers’ claims “did not lead to the discovery of any new … violations.” The court then dismissed the case as “meritless.” CNBC has contacted the U.S. Department of Justice for comment.
The ICIJ report says Knight’s latest claim alleges that the U.S. government “lied that it had conducted ‘a lengthy, costly, and substantial investigation’ into his claims or it was “fully aware” of the transactions he had provided “and simply lied to conceal them,” adding: “The Government’s own statements support the latter scenario.”
In response to a CNBC request for comment, a Standard Chartered spokesperson described Knight’s court filing as “another attempt to use fabricated claims against the bank, following previous unsuccessful attempts” and said that the “false allegations underpinning it have been thoroughly discredited by the U.S. authorities who undertook a comprehensive investigation into the claims and said they were ‘meritless’ and did not show any violations of U.S. sanctions.”
