[FinCEN Files] ③Korean companies spotted in the Middle East money laundering networks

2020년 09월 22일 08시 00분

USD 20 billion, equivalent to KRW 23 trillion. 
The figure represents the most conservative estimation by investigative authorities of the money that Reza Zarrab has laundered. Reza Zarrab is a transnational money launderer linking Turkey and Iran. 
In 2018, the Organized Crime and Corruption Reporting Project(OCCRP) obtained court documents of the Zarrab case through the US Freedom of Information Act or FOIA.
The Korea Center for Investigative Journalism(KCIJ)-Newstapa collaborated with OCCRP and the International Consortium of Investigative Journalists (ICIJ) in this cross-border investigation. The data acquired by OCCRP includes over 750,000 bank transaction records that Zarrab used to move funds between 2007 and 2015.
First, we sorted the data by entering the search word “Korea.” We also manually entered the names of major Korean corporations. We have also merged the Zarrab data with the leaked FinCEN files.
As a result, we were able to filter hundreds of transactions involving over 80 Korean companies from the database. The total transaction was approximately USD 110 million, exceeding KRW 120 billion. 
One exotic name especially stood out. According to the data, Al Nafees Exchange conducted the most number of transactions with Korean companies, making up more than a half of the total transactions.
Al Nafees is a money exchange in Dubai run by Reza Zarrab’s father Hossein Zarrab. In 2013, Hossein Zarrab and Al Nafees Exchange were fined by the Office of Foreign Assets Control (OFAC) for violating U.S. sanctions against Iran.  
▲ Al Nafees(left side first shop) was in Dubai near the city’s famous gold market. (Source: Google Street View)
According to the data, Hyundai Group companies including Hyundai Motor Company, Hyundai Heavy Industries and Hyundai Corporation received the most payments through Al Nafees as the amount of USD 18.4 million was wire transferred through this private money exchange.
In addition to Hyundai Group, LG Chem, LG International, Hanwha and Posco International were other Korean conglomerates that received substantial wire transfers through Al Nafees.
It was between 2010 and 2015 that Reza Zarrab carried out his gas-for-gold scheme taking advantage of the so-called 'golden loophole' created by US sanctions against Iran. 
When narrowed down to this specific period, a total of USD 288 million worth of transactions were made with Korean companies via money laundering networks including the Zarrab Network.
▲ Between 2010 and 2015, during which Reza Zarrab carried out his gas-for-gold scheme taking advantage of the so-called 'golden loophole' created by US sanctions against Iran, a total of USD 288 million worth of transactions were made with Korean companies via money laundering networks including the Zarrab Network.
Hyundai Heavy received USD 2.65 million through money laundering firms.
Newstapa asked Hyundai Heavy to know how and why they had gotten involved in making transactions with this Turkish company. Hyundai Heavy answered they were normal payments for the company’s export of construction equipment. 
Samsung C&T’s total financial transaction amount far exceeds that of Hyundai Heavy’s as it adds up to USD 21.6 million.
Samsung C&T was found to have received funds via HMEA. Although HMEA is not part of the Zarrab scheme, the company was established by Iranian-Swedish Hatam Khatoun Nema for money laundering. According to OCCRP’s report, HMEA sent USD 450 million into Iran through falsified trade documents. 
Newstapa requested Samsung C&T’s explanations on their business with the Hong Kong company at issue.
“We have not been able to confirm the transactions concerning HMEA,” Samsung C&T replied.
Newstapa reporters were able to spot additional financial transactions between HMEA and Samsung in the leaked FinCEN files. This time it involved Samsung Electronics. The report underlined Samsung Electronics as one of the “10 most significant” counterparties of HMEA between January and November 2013.
According to the suspicious activity reports, approximately USD 400,000 and USD 220,000 were wire transferred between HMEA and Samsung Electronics and Suzhou Samsung Electronics, respectively.
Newstapa reached out to the Korean companies to ask about their dealings with obscure companies.
What came back was a similar explanation. They claimed that those money were normal payments which they received through money transfer intermediaries specifically designated by their trading partners. 
Still, regardless of their intention, Korean companies could also suffer damages for moving funds via companies that form part of a transnational money laundering network.
▲ The table shows the fines paid to the United States by major international banks since 2004 until recently. (Source: CRS, July 2020)
The table above shows major settlements made between the United States and major banks in the world for sanctions evasion and money laundering.
In April 2020, the Industrial Bank of Korea was also slapped with substantial penalties of USD 86 million for failing to implement an adequate anti-money laundering system.
A bigger problem exists that a transnational money laundering network like the Zarrab scheme contributes to the growth of international organized crimes.
ReportingYongjin Kim, Wooram Hong, Jiyoon Kim
Video ReportingHyoung-seok Choi, Hyeong-min Jeong, Jun-sik Oh
Video EditingSeok-min Yoon
CGDong-woo Jung
DesignDo-hyeon Lee