HSBC 'processed £435m of laundered Russian cash'

Barclays, Lloyds and Royal Bank of Scotland also reportedly caught up in 'Global Laundromat' scandal

HSBC London hq
(Image credit: Ben Stansall/AFP/Getty Images)

British bank HSBC has been accused of passing millions of pounds of transactions in a global money-laundering scandal with roots in Russian organised crime.

According to a report in The Guardian, it processed $545.3m (£437.3m) out of Russia between 2010 and 2014, mostly through its Hong Kong branch.

Other UK-based banks are also implicated, including Barclays, Lloyds and Royal Bank of Scotland, which, through NatWest and Coutts, is thought to have moved a total of $147m (£118m).

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Police in Latvia and Moldova, who uncovered the scandal, dubbed "the Global Laundromat", have traced about $20bn (£16bn) in transfers out of Russia. However, they believe the true figure could be closer to $80bn (£64bn).

Reports say the transfers were typically facilitated by one firm agreeing to lend money to another, with the "debt" underwritten by a third Russian company.

The loanee company would then "default" on that debt, at which point the borrowings would be certified by a judge and the Russian guarantor would step in to pay up.

Cash would be sent to accounts in Moldova, from where it was moved to Latvia and then on to as many as 96 other countries.

The scandal is said to have involved a core group of 21 companies, most of them owned anonymously through offshore shell companies and registered with Companies House in London.

The Guardian reports that a company based on Tooley Street in London, around the corner from the mayor of London's office and City Hall, posted income of £1 in 2013, but was involved in $9bn (£7.2bn) worth of transactions during the period in question.

Investigators, who say the money involved was "obviously either stolen or with criminal origin", estimate a group of about 500 Russians were involved, including oligarchs, bankers and figures working for or connected to the Federal Security Service (FSB).

The UK banks did not deny the information, but each said they take extensive precautions against money laundering. There is no suggestion of any deliberate wrongdoing.

A spokesperson for HSBC said: "This case highlights the need for greater information sharing between the public and private sectors, each of whom holds important information the other does not."

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