US state charges Stanchart of $250-bn secret deals with Iran

The UK-based bank, which has significant presence across the world, has also been found to have deficient money laundering controls in its outsourcing of work to India, found a probe by New York State Department of Financial Services.

"For almost ten years, SCB (Standard Chartered Bank) schemed with the Government of Iran and hid from regulators roughly 60,000 secret transactions, involving at least USD 250 billion, and reaping SCB hundreds of millions of dollars in fees," the New York state department said in a 27-page order.

"SCB's actions left the US financial system vulnerable to terrorists, weapons dealers, drug kingpins and corrupt regimes, and deprived law enforcement investigators of crucial information used to track all manner of criminal activity," it added.

The order further said SCB had assured the Department in May 2010 that it would take immediate corrective actions on issues previously raised by the US Office of Foreign Assets Control (OFAC).

Notwithstanding that promise, the state department's last regulatory examination of the banks' New York branch in 2011 identified continuing and significant BSA/AML (Banking Secrecy Act/Anti Money Laundering) failures.

Among these, the bank was outsourcing its "entire OFAC compliance process for the New York branch to Chennai, India, with no evidence of any oversight or communication between the Chennai and the New York offices." MORE