Deloitte Managed to Get Entangled in a Big International Money Laundering Scheme (Allegedly!)

Reuters reports that a banking unit within Standard Chartered Bank hid more than $250 billion of transactions "by scheming with Iran" that is in violation of U.S. anti-mony laundering laws. Of course, this multitude of transactions couldn't simply have two conspirators, and the order issued by New York's Department of Financial Services fingers Deloitte:

[Standard Chartered Bank ("SCB")] intentionally withheld material information from New York and Federal regulators in its effort to service Iranian Clients.  SCB carefully planned its deception and was apparently aided by its consultant Deloitte & Touche, LLP (“D&T”), which intentionally omitted critical information in its “independent report” to regulators. 
The scheme in question relates to "U-Turn" transactions that Reuters describes as "money moved for Iranian clients among banks in the United Kingdom and Middle East and cleared through Standard Chartered's New York branch, but which neither started nor ended in Iran."  They were allowed until November 2008 after the Treasury determined that they were being used for nefarious reasons. Allegedly, the transactions continued and it was making some people quite uncomfortable:
[New York DFS Superintendent Benjamin] Lawsky's order quotes a senior Standard Chartered official in London who, upon being advised by a North American colleague that its Iran dealings could cause "catastrophic reputational damage," reportedly replied: "You f—ing Americans. Who are you to tell us, the rest of the world, that we're not going to deal with Iranians."
We are prudes compared to the Brits and Europeans, aren't we? Anyway, how was Deloitte involved precisely? The order explains:
Having improperly gleaned insights into the regulators’ concerns and strategies for investigating U-Turn-related misconduct, SCB asked D&T to delete from its draft “independent” report any reference to certain types of payments that could ultimately reveal SCB’s Iranian U-Turn practices.  In an email discussing D&T’s draft, a D&T partner admitted that “we agreed” to SCB’s request because “this is too much and too politically sensitive for both SCB and Deloitte.  That is why I drafted the watered-down version.”

That could prove to be a very unfortunate statement. According to the footnotes of the order, the Deloitte partner in question was the "Global Leader of Anti-Money Laundering/Trade Sanctions Division" and this was written "to SCB’s Head of Compliance, Project Manager for the Lookback Review, Compliance Officer and a Manager from Deloitte and Touche dated October 8, 2005."

Deloitte has not issued a statement in the reports we've seen, but it's safe to say this isn't the kind of "exciting international experiences" it would want to market to recruits this fall.

Standard Chartered left U.S. vulnerable to terrorists [Reuters]
Order Pursuant to Banking Law § 39 [DFS]

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