12 Biggest Money Laundering Scandals in History

Money laundering has always been around, but technological improvements and the new ways fraudsters discover to continue their crime has made the topic a very important one in 2025. In this blog post, we’ll be giving details about 12 of the most talked money laundering cases. There are many reasons, industries and politically exposed persons (PEPs) involved with these scandals and highlighting them is a sure way to prevent them from ever occurring again.

Why These Scandals Still Matter?

Money laundering follow three stages called placement, layering, and integration. These methods are used when placing the illicit funds into the financial system, then hiding their origin by moving the funds around a bunch, and finally placing the money in a seemingly legitimate situation. Analysing these examples will give your company a headstart in compliance. Money laundering has been identified as a global threat since it is estimated that $800 billion to $2 trillion is laundered globally each year.  In October 2024, TD Bank faced unprecedented penalties of around $3 billion since they were severely deficient when it comes to their anti money laundering (AML) compliance program.  These investigations shows how inefficient some of these companies’ compliance are. The gaps in compliance is then encouraged by regulatory bodies to be improved by having advanced AML systems. 

12 Biggest Money Laundering Cases in History

1. Danske Bank – $230 Billion Laundered via Estonia Branch 

Danske Bank’s Estonia branch has been the source of many investigations. According to CNBC, starting from 2007 going until 2015, this branch was involved in €200 billion (roughly $234 billion) worth of suspicious transactions. An internal investigation has revealed this number and it was then reported both by the bank and the regulators. Non-resident customers may be a sign of trouble, and this branch has accepted transactions of about 15000 people, all of them non-residents. Most of these were then revealed to be shell companies with weak Know Your Customer (KYC) checks. The branch was not using the Copenhagen based compliance system of Danske and this lead to further non-compliance and enough regualtory gaps for illicit funds to enter. As a result of this case, many criminal investigations in several places including the U.S., Denmark, and Estonia have taken place.

2. HSBC – $1.9 Billion Fine in 2012  

HSBC is also involved with one of the biggest money laundering cases in the world. For our readers who doesn’t know, in 2012, it was discovered that HSBC failed to abide by regulations and let drug cartels make transactions with its accounts. At least $881 million was laundered using the US bank starting from mid-1990s up until 2006. What’s shocking, though, is that HSBC let around $670 in wire transfers and $9.4 billion in cash be moved around by drug cartels and sanctioned countries. The bank violated laws like the Bank Secrecy Act, Trading with the Enemy Act, and International Emergency Economic Powers Act by causing AML failures and ignoring the SAR red flags raised internally. The result was the HSBC getting fined and paying around $1.9 bn fines which was the biggest penalty for a crime of this kind in that time. The company then promised to improve its AML compliance systems.

3. 1MDB – Malaysia’s Sovereign Wealth Fund Scandal 

This unbelievable scandal was going on between the years of 2009 and 2015.  For our readers who don’t recognise the case, this was about 1Malaysia Development Berhad (1MDB), also known as Malaysia’s development fund. The former Prime Minister of the country, Najib Razak, and financier Jho Low, were moving these funds through their connected offshore shell companies and two former Goldman Sachs bankers were also involved. Around $4.5 billion was taken from the fund, laundered through the U.S., Singapore, Switzerland and other countries. The U.S. says the money they’re trying to recover was gambled in Las Vegas, used to buy hotels, apartments, a luxury yacht, a jet, diamond jewelry and art works and to finance Hollywood films including the “Wolf of Wall Street” and “Dumb and Dumber To.” Police have also seized hundreds of luxury handbags, jewelry and cash in total worth more than $266 million during raids on apartments linked to Najib’s family. Because of this scandal, Malaysia has received its worst ever rating in the Corruption Perceptions Index of Transparency International. Goldman Sachs was dealing with the fund and their failings to spot red flags has cost them $2.9 billion in penalties since $4.5 billion of the $6.5 billion they helped raise was stolen. Two former Goldman bankers were criminally charged, also. The former Prime Minister Razak has also been found guilty, his prison term began in 2022 after several appeals, his sentencing was then halved to 6 years in 2024.

4. Wachovia Bank – $378 Billion in Drug Money 

We need to turn back to between 2004 and 2007 for this case.  Throughout these years, Wachovia Bank has funneled funds involved in drug money laundering from Mexican and Colombian money-transfer companies, also known as casas de cambio. In March 2010, Wachovia said that it had weak anti-money laundering controls on $378.4 billion of transfers during that time period. Because of the total volume of funds that were not subject to anti-money laundering review, the Wachovia case became the largest violation of the Bank Secrecy Act in history at that time. The bank ultimately paid around $160 million in fines because of their weak AML systems. 

5. Nauru – The Island That Laundered Billions 

You might recognise Nauru from its phosphate mines, which helped them have one of the highest GDPs per capita in the world in 1970s, or from its size, it being the third smallest country in the world. That’s not all, though. The island was a hotspot for shell banks and odd financial activities in the 1990s. It was widely used for money laundering, the Russian central bank estimated around $70 billion was funneled using the shell banks created in Nauru. At the time, that amount is almost 700 times Nauru’s annual GDP. 400 shell banks were created in the country during that era, half of them being created by Russian clients. Since Russian crime groups used this country to evade taxes and money laundering was widely popular, the Financial Action Task Force (FATF) blacklisted Nauru in 2000. It took them around five years to get out of the FATF blacklist. They achieved this by putting in the work by getting rid of shell banks and having stronger AML controls, but it goes to show how important compliance is and how severe the consequences may be. 

6. Liberty Reserve – Digital Money Laundering Network 

Liberty Reserve was founded in 2006 as a digital currency system majorly known for its anonymity benefits. The Costa Rican company was used mostly by cybercriminals for money laundering. It was shut down in 2013 due to these financial crimes being discovered. Budovsky admitted in his plea agreement to laundering more than $250 million in criminal proceeds. Prosecuters are still claiming that around $6 billion was laundered using crimes like credit card fraud, identity theft, and drug trafficking. The Patriot Act has helped shut down this company and the founder, Arthur Budovsky, was later sentenced to 20 years in prison as well as financial penalties and forfeit of funds. 

7. Troika Laundromat – Russian Oligarch Network 

This next case has taken place between 2003 and 2013 and it involves Russia’s Troika Dialog bank.  The money laundering operation is known as the Troika Laundromat. At least 75 offshore companies, many of them registered in the British Virgin Islands, were used to funnel an amount of over $4.8 billion. Banks like Ūkio Bankas in Lithuania and Deutsche Bank, Raiffeisen, and Citigroup in Europe and the U.S. were used to move the money along. The money was then used by Russian elites to purchase luxury goods, real estate, and used for lobbying purposes. The scheme was discovered in a large set of banking transactions and other documents obtained by OCCRP. The case is still heavily under-investigated.

8. Deutsche Bank – Mirror Trading Scandal 

Going on between 2011 and 2015, the money laundering operation involving Deutsche Bank’s Moscow, London, and New York branches is known as mirror trading. Around $10 billion of funds were moved out of Russia. Traders were buying Russian stocks in rubles for their Moscow clients and then selling the same amounts of stocks in London for offshore firms, they were more often than not linked to the same owners. The pattern was what helped officials discover the scheme. This was once again mostly used by sources close to Russian President Vladimir Putin to move illicit funds as they’re sanctioned. Deutsche Bank was fined $425 million and £163 million by the New York State Department of Financial Services (DFS) and Financial Conduct Authority (FCA) in the UK respectively. 

9. Credit Suisse – Mozambique Tuna Bond Scandal 

Now, let’s go over to Mozambique to talk about their biggest scandal. Taking place in the early 2010s, the government of Mozambique has taken loans of around $2 billion from banks around the world like Credit Suisse and VTB Bank. The loans were taken to be spent on maritime projects of the company, one of these projects was a tuna fishing venture. These loans were hidden from the public as well as International Monetary Fund. More than $200 million of those funds were used for bribes to Mozambican officials and Credit Suisse officials. It is said that the former Mozambique Finance Minister Manuel Chang also received $7 million as a bribe. Chang was later sentenced to 8.5 years in prison for this scheme.  What happened as this case’s result? Credit Suisse was punished severely. The bank agreed to pay $475 million in fines. These fines were paid to regulators in the UK and the U.S. Credit Suisse has also agreed to forgive $200 million of Mozambique’s debt. 

10. Sinaloa Cartel & HSBC Mexico 

This next scandal takes place between 2006 and 2008, once again involving HSBC. The Mexican subsidiary of the bank was faced with money laundering accusations after its ties to the Sinaloa drug cartel was discovered. Funds of over $1.1 billion were involved in drug trafficking from Mexico to the U.S. and the bank was helping complete the moving of funds. In those three years, 316,000 transactions that are equilavent to around $670 billion were not monitored at HSBC Banks USA since HSBC Mexico has failed to divide customers to correct risk levels. Since HSBC failed to monitor its high-risk client adequately, it was fined severely. An amount of $1.9 billion was the fine given to HSBC in 2015 and the bank then later was added into a Deferred Prosecution Agreement with U.S. officials.  

11. FinCEN Files Leak (2020) 

This case is newer, taking place in September of 2020. Known as the FinCEN Files, the document leaks has shown that transactions totaling over $2 trillion were deemed suspicious between 1999 and 2017. More than 2,100 Suspicious Activity Reports (SARs) were filed with FinCEN accordingly. The leaked documents have shown that despite internal warnings, large amounts of money were routinely passed through, HSBC, JPMorgan Chase, Deutsche Bank, and Standard Chartered can be examples of banks allowing this. The transactions were allowed even though many of them were linked to corruption, organized crime, and terrorism. The findings of the files have been used to make calls of reforming AML regulations and making them stronger. 

12. National Health Care Fraud Takedown – $2.75 Billion in False Claims 

The last and latest scandal on our list involves healthcare fraud. The U.S. Department of Justice (DoJ) has said in June 2024 that as a result of healthcare fraud crackdown, 193 defendants in 32 federal districts were criminally charged. Some of these people are doctors, nurse practitioners, and similar licensed medical professionals. These professionals were running a scheme that had $2.75 million in false claims and $1.6 billion in actual losses to Medicare and Medicaid. As a result, over $231 million in assets were taken with the coordination of DoJ’s Health Care Fraud Strike Force. The action was supported by the Department of Health and Human Services (HHS), the Office of Inspector General (OIG), the FBI, and the DEA. 

Key Lessons from Major Money Laundering Scandals

When looking back at the scandals of the last few decades, our Sanction Scanner experts notice a few patterns. The first big problem is the ultimate beneficial owner (UBO) opacity. Criminals use shell companies and structures designed to hide the actual owner. This leads to banks and similar firms being unable to detect the sanctioned parties involved and letting their transactions be completed. Another failing is manual monitoring. When these complex transactions are manually controlled, the human error lets odd activities slip through. One other problem is the cross-border gaps. Criminals thrive on using these jurisdictional differences to move their funds around, being aware of different regulations specified for that region is crucial. If a company is failing to file Suspicious Activity Reports (SARs) in time, the regulators will then be late to catching these financial crimes, the results hurting both sides. 

How AML Technology Could Have Prevented These Scandals?

With AML compliance systems that are improved thanks to advanced technology, companies and banks can stop their systems from failing and letting financial crimes slip through. One way these tools help is by providing transaction monitoring in an automated manner in real-time. Transaction monitoring will help your company by detecting suspicious activities, encouraging you to file reports accordingly. Sanctions and PEP checks are especially helpful when finding out which of your customers are of high-risk. This knowledge will then help your company by focusing more on high-risk parties or banning them from making transactions. UBO discovery tools are now known to be revealing the actual owner of assets and companies. This will stop the moving of illicit funds through layering.