Famous Money Laundering Cases

March 24, 2023
8 Famous Money-Laundering Examples of the Past 50 Years in the United States

Money laundering is the process of disguising the proceeds of illegal activities as legitimate funds. From state-backed embezzlement schemes to covert operations by major corporations, the act of disguising illicit money through complex sequences of transfers and transactions has become an art form. With the advent of the Whistleblower Anti-Money Laundering Program offering insiders up to 30% of what the government recovers and money laundering estimates to be in the hundreds of billions there are sure to be many more cases to follow. The following is a list of high-profile famous money laundering cases that highlight notorious money laundering activities across the globe.

The 1MDB Scandal (2016) – The 1Malaysia Development Berhad (1MDB) scandal is one of the largest financial scandals in recent history, involving Malaysia’s state investment fund.  Established in 2009 to promote economic development, 1MDB turned into a vehicle for widespread corruption and money laundering. More than $4.5 billion was misappropriated by high-level officials and their associates through foreign bank accounts and shell companies. The chairman of the 1MDB, Najib Razak, was accused of political bribery, opulent spending, and property investments with fraudulent money.  Several individuals, including a former top executive at Goldman Sachs, were charged in connection with the case.

The “Panama Papers” Scandal (2016) – The release of the “Panama Papers” revealed the widespread use of off-shore shell companies to launder money and evade taxes. In April 2016, 11.5 million confidential documents from a Panama-based law firm, exposed a sprawling network of offshore companies used by the world’s elite. The leak was passed to the German newspaper Süddeutsche Zeitung and then shared with the International Consortium of Investigative Journalists (ICIJ). It laid bare the secret dealings of current and former heads of state, hundreds of public officials, and even a myriad of celebrities and business figures. The scandal implicated several high-profile individuals and companies and still echoes to this day.

The FIFA Scandal (2015) – In 2015, the Fédération Internationale de Football Association (FIFA) became embroiled in one of the most significant corruption scandals in sports history. Several high-ranking FIFA officials were charged with money laundering in connection with the organization’s corruption and bribery scheme.

The Cryptocurrency Scandal (2019) – The use of cryptocurrency has become a popular method for money launderers to move funds anonymously. Several high-profile cases involving the use of cryptocurrency in money laundering have come to light in recent years and further several implosions of companies like FTX may have money laundering implications. FTX CEO Sam Bankman-Fried was convicted of a scheme based on falsified evaluations much like a Ponzi Scheme, leading to the implosion of the FTX company. Similar bad behavior happened at the company Celsius where ordinary every day individuals who deposited funds with their platform were lost to some sort of Ponzi Scheme and to add insult to injury some are even being sued for taking out their own money while some of the former executives absconded with millions and opened up new derivative companies. Today, cryptocurrency remains a novel investment methodology that comes with a risk of potential fraud and whistleblower cases into cryptocurrency can implicate numerous programs including the CFTC whistleblower program, SEC whistleblower program as well as the AML.

The FinCEN Files (2020) – The United States Financial Crimes Enforcement Network (FinCEN) had over 2,000 suspicious activity reports (SARs) leaked in 2020. The release of the FinCEN Files, a collection of secret government documents, revealed that major banks have been involved in facilitating money laundering on a massive scale. Specifically, many major banks including HSBC and J.P. Morgan profited from failing to combat money laundering. For instance, Barclays Bank was implicated in assisting Russian laundering schemes and moving millions for Putin and his associates.

The Deutsche Bank Scandal (2020) – In 2020, Deutsche Bank found itself at the center of a significant regulatory scandal, resulting in a $150 million fine by the New York State Department of Financial Services (NYDFS). The German bank was charged under the Foreign Corrupt Practices Act as well as a commodities fraud scheme for obscuring bribes and other fraudulent funds.

The MoneyGram Scandal (2021) – In 2023, over $115 million was paid out by MoneyGram International Inc to its consumers by order of a joint issue from the Federal Trade Commission (FTC) and DOJ. MoneyGram, a global leader in cross-border P2P payments and money transfers, was scrutinized for its inadequate anti-money laundering (AML) measures and for aiding in wire fraud schemes.

The Bank of Cyprus Scandal (2021) – The Republic of Cyprus, an island in the Mediterranean, has been an infamous haven for money launderers attempting to enter the European Union. The Bank of Cyprus was accused of turning a blind eye to money laundering activities, particularly those connected to Russian oligarchs. The bank was fined $40 million in the case.

These examples of money laundering cases show that the problem is widespread and affects various sectors, from financial institutions to sports organizations.

We have also compiled a list of some of the most famous money laundering cases in the United States that span across different sectors, from banks to energy companies to insurance companies:

BCCI Scandal (1991) – The Bank of Credit and Commerce International (BCCI) was found to have laundered money for drug traffickers, terrorists, and arms dealers. BCCI is a landmark case in money laundering due to its expansive nature in terms of both global reach and length.  The bank was eventually shut down by regulators and several individuals were convicted of money-laundering and other crimes.

RJR Nabisco (1992) – The case involving RJR Nabisco and their allegations of money laundering centers around the sale of cigarettes in Russia during a time when the country was experiencing significant economic and political upheaval. The tobacco and food conglomerate RJR Nabisco was accused of money laundering in connection with the sale of cigarettes to organized crime figures in Russia. The company eventually settled the case with the government for $15 million.

Enron (2001)The Enron scandal, unveiled in October 2001, stands as one of the most infamous cases of corporate fraud and corruption in American history. The energy giant Enron was found to have used off-shore shell companies and accounting tricks to hide debt and inflate profits. Several executives were convicted of money laundering and other crimes in connection with the company’s collapse.

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AIG (2005) – In 2006, American International Group (AIG) faced serious allegations related to assisting clients in money laundering activities. AIG, through some of its subsidiaries, had sold products that effectively helped clients hide money from authorities or launder funds. The insurance giant AIG was accused of using off-shore shell companies to hide transactions from regulators and avoid taxes. The company eventually paid a $1.6 billion fine to settle the case.

Stanford Financial Group (2009)United States v. Robert Allen Stanford et al. exposed one of the largest Ponzi schemes in American history, rivaled only by the infamous Madoff scandal. The investment firm Stanford Financial Group was found to have operated a massive Ponzi scheme and laundered billions of dollars in investors’ money. The company’s founder, Allen Stanford, was convicted of money-laundering and other crimes and was sentenced to 110 years in prison.

HSBC (2012)The HSBC scandal of 2012 was a landmark case in the banking industry, exposing widespread shortcomings in anti-money laundering (AML) practices among global financial institutions. The global bank  was found to have laundered money for Mexican drug cartels and violated sanctions against Iran. The bank eventually paid a $1.9 billion fine to settle the case.

Deutsche Bank (2017) – In 2017, Deutsche Bank was fined $630 million by U.S. and UK financial regulators for its failure to prevent a money laundering scheme that allowed $10 billion to be illegally moved out of Russia. This scheme, known as “mirror trading,” involved clients purchasing stocks in Russia in rubles and simultaneously selling the same stocks through the bank’s London branch in dollars, effectively laundering money and moving it offshore without proper oversight. At the time, it was the largest restitution ordered by the FCA for AML control infractions.

Danske Bank (2018) – Danske Bank entered a guilty plea as part of a $2 billion agreement to resolve investigations into its involvement in one of the largest money laundering scandals in history. The 2018 scandal involved approximately 200 billion euros worth of suspicious transactions that flowed through the Estonian branch of Danske Bank from 2007 to 2015. These transactions were predominantly linked to non-resident accounts, which facilitated a vast and complex money laundering operation involving funds from Russia and other former Soviet states. The Danish bank Danske Bank was found to have laundered $234 billion through its Estonian branch, making it one of the largest money-laundering scandals in history.

As you can see, this highlights the need for effective regulation and enforcement to combat money laundering and protect the integrity of the financial system, which is why the new Anti-Money Laundering Whistleblower statute is so critical. The new AML whistleblower statute provides teeth to insiders who blow the whistle on money laundering and with billions laundered every year, a money laundering whistleblower could receive hundreds of millions in money laundering whistleblower rewards. However, considering the labyrinthine nature of the legal landscape concerning whistleblowing, it is essential to hire a whistleblower law firm to ensure success. An experienced whistleblower attorney can help whistleblowers effectively file and organize their case, while ensuring they are protected throughout the process.