Trump's plan to use a British bank to target the Democrats

Telegraph

2 days ago

The elements of the story could be taken directly from a thriller: a British whistleblower with military credentials, secret meetings with top justice officials, a trail of encrypted spreadsheets allegedly linking a British bank to Iran's military and terror networks, and now, an explosive political backdrop involving President Donald Trump and his vendetta against the Democrat prosecutors who once tried to dismantle his empire.
At the centre of it all is Standard Chartered, the UK's fifth-largest bank and a household name thanks to its sponsorship of Liverpool Football Club.
The bank has already been fined nearly $2bn by American authorities for breaches of sanctions against Iran involving its US branch – having admitted wrongdoing for the first time in 2012 and then again in 2019. It is now facing fresh allegations, which it denies but which could yet see it forced to pay much more.
According to whistleblower Julian Knight, a former RAF officer turned compliance executive at the bank, Standard Chartered's transgressions go further than previously admitted. He alleges the bank also concealed an additional $10bn in transactions involving Iranian firms carried out through its New York outpost, which it is yet to answer for.
Some of the alleged transactions are said to have been linked to Iran's military, nuclear programme, and US-designated terrorist organisations such as Hezbollah and Hamas. The bank has always denied suggestions it conducted transactions for terror groups.
The alleged dealings, which are claimed to have taken place between 2008 and 2013, came after Standard Chartered had announced in 2007 that it would cease all new business with Iranian customers as Washington ramped up pressure on the Islamic Republic.
Knight (who left the bank in 2011) says he and fellow whistleblower Robert Marcellus, a currency trader, discovered the supposedly hidden transactions after re-examining spreadsheets and documents provided to US authorities in the past.
But when they brought the new 'evidence' to New York attorney general Letitia James's office last year, Knight claims, officials failed to act.
His allegations have now been seized on by Trump, who has repeatedly clashed with James, a Democrat, in recent years.
On July 27, the president used his Truth Social account to post an article by The Gateway Pundit, a Right-wing American news website, alleging the attorney general – whose slew of legal cases against Trump, including a $454m civil fraud case last year, have seen the pair repeatedly clash publicly – failed to investigate Standard Chartered despite the new trove of information presented by Knight.
That followed on from a seemingly important intervention by the Department of Justice, which last month moved to review previous court decisions related to the saga.
The article Trump's account promoted described the case as James's 'biggest scandal yet'. In the past, the president has also labelled the New York attorney general a 'totally corrupt politician'.
Whilst James appears to be the focal point of the Trump administration's concern, it has also taken aim at his Democratic predecessors over the case – clearly viewing it as a potential Achilles heel.
Kari Lake, one of the president's most trusted allies, who serves in the Trump administration as senior advisor at the US Agency for Global Media, says: 'This is a serious issue. President Trump – trying to undo the damage caused by Biden and Obama with their destructive policies toward Israel and America as well as toward the people of Iran – has put forth a maximum-pressure zero-tolerance policy blocking any funding to Iran and its terror network.
'And now a British bank who operates in the United States is accused of processing billions of illicit payments to Iran. And the New York attorney general's office led by Tish James knew about it and did nothing.
'The Fed should have spotted these payments and stopped them, but they did not. The question is was it simply ineptitude on the part of Letitia James and the Federal Reserve or were they complicit in helping the Iranian regime?'
The president's political war against the Democrats threatens to drag the bank back into uncomfortable territory, six years after it was fined $1.1bn when a US criminal investigation revealed breaches of sanctions on Iran and other countries. That followed on from a damning August 2012 ruling which saw Standard Chartered forced to shell out $340m to settle claims that it had left the US financial system 'vulnerable to terrorists' by hiding transactions linked to Iran.
The following month, then chancellor George Osborne is reported to have intervened on the bank's behalf amid concerns in London that American regulators might withdraw Standard Chartered's US licence over the scandal. By the end of the year, the bank had escaped prosecution and kept its US licence.
Knight claims the bank's internal data shows a far deeper pattern of deception. He argues that he, Marcellus and a forensic investigator 'decloaked' Excel spreadsheets to reveal 'a vast number' of previously undetected 'concealed transactions with sanctioned Iranian entities'.
He alleges these findings were presented to officials in a series of meetings last year, including with Chris D'Angelo, James's right-hand man within the New York Attorney General Office.
'They [the meetings] were held at the invitation of the NYAG. I flew to New York to be present for the first meeting. We cannot understand why these transactions were not previously disclosed by the bank to the NYAG,' Knight says.
In pursuit of a payout
Cynics might suggest the whistleblowers are simply looking to cash in, and that Trump's return to the White House was what they needed to turn their fortunes around.
Knight and Marcellus have unsuccessfully to date pursued a payout for their whistleblowing under a federal statute which means those who expose wrongdoing can lay claim to proceeds generated by fines, if their intervention proves integral to legal action being taken.
The pair's case, known as the 'Brutus litigation', argues they provided material to US law enforcement agencies that proved Standard Chartered had acted in breach of sanctions.
The administrations headed by Barack Obama and Joe Biden appeared to refuse to back the whistleblowers' claims, with government agencies arguing the fines imposed on the bank were based on evidence unrelated to the material provided by Knight and Marcellus.
Standard Chartered itself argues the pair have concocted 'fabricated claims' in order to seek 'personal financial gain'.
But the tide may be turning under Trump, with the Department of Justice last month giving notice that it wanted to review previous decisions which effectively buried the whistleblowers' arguments.
In the filings, seen by The Telegraph, the DoJ stated that it wanted a 30-day extension to 'confer internally' about the issue.
Danny Alter, former general counsel at the New York Department of Financial Services, who led previous enforcement actions against Standard Chartered, says the DoJ's move was 'highly unusual' and 'suggests that there's been a significant change in the government's thinking'.
'If accurate… recently revealed evidence of the many billions of US dollars in criminal transactions that Standard Chartered allegedly conducted for Iran's military complex and terrorist proxies, like Hamas and Hezbollah, is mind boggling,' Alter says.
'It is a financial blueprint for how Iran built its nuclear and ballistic missile programmes and funded global terrorism, despite years of US economic sanctions.
'You have to wonder if the enormous risks and costs of the recent US military operations to eliminate Iran's nuclear programme played a role in the government's seeming re-evaluation of Standard Chartered's case and the bank's potential liability.'
Standard Chartered, for its part, remains defiant. Referring to the case brought by Knight and Marcellus, a spokesman said: 'The long-running qui tam lawsuit against Standard Chartered has been dismissed multiple times. The trial court already twice rejected the claims brought by a former employee and his associates who have for more than a dozen years sought personal financial gain through fabricated claims against the bank.
'The frivolous appeal of that rejection remains pending. The US government long ago concluded that there is no merit to the baseless accusations of sanctions and plaintiff's various arguments have been described by the courts as 'on the verge of vexatious and frivolous', 'without merit' and 'threadbare'.
'We will continue to vigorously defend against attempts to profit from fabrications and to damage our reputation.'
But the DoJ's recent move may signal the case is not dead after all. Ultimately, Standard Chartered could soon yet find itself back in the spotlight - this time, not just as a defendant in a sanctions case, but as an unwitting pawn in a bitter political feud.