[FinCEN Files] ②Samsung Electronics’ suspicious money transactions spotted by U.S. watchdog

2020년 09월 21일 08시 00분

Suspicious transactions of a Samsung Electronics overseas subsidiary was identified again in money laundering intelligence documents leaked from the U.S. financial watchdog. 
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This is a corporate bank account opened at Citibank London branch. The Korea Center for Investigative Journalism(KCIJ)-Newstapa first found this bank account in 2016.
Owner of this account was Samsung Electronics Overseas B.V., the global mobile handset giant’s subsidiary for regional sales in CIS. 
The CIS regional sales subsidiary is located in the Netherlands. Since the middle of 2000s, a huge amount of U.S. dollars, as little as several tens of thousand dollars up to hundreds of thousand dollars, have been transmitted into this subsidiary’s London bank account one after another. Senders of the frequently transmitted money were found to be shell companies.
Such a suspicious movement of money was exposed thanks to a huge volume of money transactions records from East Europe-based banks, which assisted money laundering networks to move money across borders. Transactions leaked from Ukio bankas, a Lithuanian bank which was closed down in 2013 for money laundering allegations. 
With the leaked documents, KCIJ-Newstapa has continued investigations on SEO’s transactions over the years. The volume of suspicious money moved into SEO’s London bank account kept increasing in the meantime.
● Shell companies → USD 24 million(approx. KRW 27 billion) → SEO’s London Citibank account (KCIJ-Newstapa reporting in March 2017)
● Shell companies → USD 93 million(approx. KRW 100 billion) → SEO’s London Citibank account (KCIJ-Newstapa reporting in March 2019)
However, Samsung Electronics headquarters remained silent. The allegation seemed to disappear from public attention.
▲Major global banks, which work as a corresponding bank for non-dollar trading small banks, are obliged to submit suspicious activity reports(SAR) to the Financial Crimes Enforcement Network(FinCEN), a division under the U.S. Dept. of Treasury. (Source: BuzzFeed News, ICIJ)
In the meantime, the International Consortium of Investigative Journalists (ICIJ) reviewed an unexpected pile of documents. The documents were suspicious activity reports (SAR), which global banks submit to the Financial Crimes Enforcement Network (FinCEN) - a division under the U.S. Department of Treasury. The confidential financial transaction data was also delivered to the KCIJ-Newstapa reporters.
From this huge pile of confidential government intelligence documents, the reporters found 12 transactions worth USD 3.34 million moved into SEO’s bank accounts from 2005 to 2016. Senders of the money were shell companies. 
▲Samsung Electronics Overseas B.V., a Netherlands-based regional sales subsidiary for CIS, received USD 3.34 million from six shell companies. Banks and the FinCEN regarded the transactions suspicious. (Source: BuzzFeed News, ICIJ)
Although the amount of newly discovered murky money was smaller than the 2017 and 2019 investigations, the 2020 discovery was more meaningful than the former findings because the grounds of KCIJ-Newstapa’s persistent allegation against Samsung Electronics were reaffirmed by the U.S. government financial watchdog reports.
At this point, questions emerged again. Why did the shell companies directly related to Russian transnational money laundering network appear as SEO’s buyers? Why were the transactions of SEO reported to the U.S. government financial crimes watchdog?
The reporters pulled out old SEO documents for review, and studied the invoices between SEO and its shell company buyers. The shell companies submitted these invoices to banks to wire transfer the money.
▲The reporters reviewed the authenticity of the invoices in a various ways.
Strange traces were spotted in different corners of the invoices. The reporters asked offshore trade experts what they may mean -- without unveiling that the invoices were issued to Samsung Electronics. The experts raised different possibilities. 
“If this was done only once, you’d say it’d be perceived as a mistaken wire transfer,” an attorney specializing in offshore financing and trading said at an interview with KCIJ-Newstapa. “But if this happened several dozen times over years, it’d be something unacceptable professionally.”
Other experts avoided making a certain conclusion. Tax accountants specializing in offshore tax evasion and big-name trade consultants maintained a careful stance while leaving an advice that the invoices have suspicious elements.
Graham Barrow, a U.K.-based anti-money laundering expert, gave a simple, firm answer at a joint interview with the cross-border investigation team, that the circumstances around SEO and its shell company buyers are certainly suspicious. 
“Most of these LLPs don’t actually do any business at all. I’ve had sights of substantial numbers of bank statements from Danske Bank in Estonia,” Barrow said. “There are hundreds of pages, allegedly, of trading. But it’s all for clinchers. It’s all based on fake contracts. There is no, or very little, goods actually moving about. It’s just paper work. And what does it allow you to do? It allows you to move money in really complicated ways to the point you have no idea where that money came from in the first place.”
From falsified signatures of key Samsung Electronics executives to non-Samsung product names, KCIJ-Newstapa tracked down the SEO’s bogus invoices and suspicious transactions in this short documentary. 
After watching this video, you’d be able to connect the dots between SEO and the shell companies and understand why Samsung failed to stay out of the U.S. financial crimes watchdog’s surveillance.
ReportingYongjin Kim, Jiyoon Kim, Myungju Lee
Video ReportingHyoung-seok Choi
Video EditingSeok-min Yoon
CGDong-woo Jung
DesignDo-hyeon Lee