$992,000,000,000 Banking Giants Fined for Role in Global Billion-Dollar Payments Scheme

July 17, 2023

Three banking giants and an additional financial institution are paying a multimillion-dollar fine for their role in a global billion-dollar fintech scam.

The Monetary Authority of Singapore (MAS) has fined DBS, OCBC, Citibank Singapore and Swiss Life for violating anti-money laundering and anti-terror financing laws connected to the $2.1 billion Wirecard AG scam.

The MAS says the financial institutions, which collectively have $992 billion in assets under management, failed to properly investigate large transactions, conduct and maintain customer due diligence, and determine the source of wealth for high-risk customers.

Wirecard, the infamous German-based payments firm, admitted back in June of 2020 that $2.1 billion in cash on its balance sheet, which was supposedly held in Asian banks, did not exist.

Executives at the company used a combination of fake transactions, forged documents, and accounting tricks to create the illusion of financial health and success.

The MAS says the financial institutions will collectively pay $3.8 million Singaporean dollars in penalties for their role in facilitating the scheme, which is worth about $2.8 million USD.

“As Singapore grows in importance as an international financial center, MAS expects our financial institutions to step up their controls against facilitating illicit financial flows.

They must implement robust measures to know their customers, monitor on-going transactions to ensure that these are consistent with their understanding of their customers and their businesses, and exercise greater vigilance when customers use complex structures…

Although the breaches were serious, MAS did not find wilful misconduct by any staff of these financial institutions.”

The Wirecard scandal led to huge losses for investors and revealed massive deficiencies in corporate governance, auditing, and regulatory oversight.

The new fines facing the four financial institutions are a fraction of their collective net worth.

DBS alone has $221 billion in assets under management and made a record $6.2 billion in profit last year.

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