JPMorgan Chase and HSBC facilitated transactions to Russian warlords sanctioned since 2016

Yevgeny Prigozhin, the late leader of the Wagner Group, a Russian private military company, was found to have used Western banks, including JPMorgan Chase and HSBC, to process payments for his operations. These banks unwittingly facilitated transactions for companies linked to Prigozhin, who had been sanctioned by the US since 2016.

The payments were connected to Wagner's extensive African activities, where the group provided military support to various regimes in exchange for mining concessions and other business opportunities. Leaked documents revealed that in 2017, a Sudanese company acting as a front for Wagner used a local bank account to send payments via JPMorgan Chase to a Chinese supplier.

Prigozhin's African operations were part of a broader strategy to strengthen ties between African states and Moscow and counter US and French influence in the region.

Despite his death in a plane crash in August 2023, the revelations about his financial dealings highlight the complex and often hidden networks supporting Wagner's activities.

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A report from a Washington-based think tank lays out the revelations, which claim JP Morgan and HSBC accepted payments from a Sudanese mining company controlled by the late Russian warlord Yevgeny Prigozhin.

• https://c4ads.org/issue-briefs/unearthed/ / https://c4ads.org/wp-content/uploads/2024/09/Unearthed-C4ADS.pdf

The latest report from the Centre for Advanced Defense Studies (C4ADS) claims that Wagner-affiliated mining companies used global banks to pay Chinese companies and local African suppliers.

According to C4ADS, this includes HSBC and JP Morgan, which inadvertently processed funds on behalf of Prigozhin in Africa.

C4ADS said: “In these instances, legitimate financial institutions facilitated the movement of funds – albeit unwittingly – that enabled PMC Wagner’s early operations on the continent.”

This system was part of the “complex financial manoeuvres” that Wagner used to expand across the continent, where the group has been accused of carrying out human rights abuses.

Leaked invoices obtained by the think tank show Western intermediary banks being used to process payments for Meroe Gold, a Sudanese mining company that served as a front for Wagner.

This includes in 2017, when Meroe allegedly paid a Chinese company for diesel generators and spare parts through Hang Seng Bank, which is part of HSBC.

The Sudanese company also allegedly used JP Morgan’s New York branch as an intermediary to pay a seller in China that same year.

There is no evidence that either bank knew it was processing transactions made by Wagner front companies.

However, C4ADS called on companies to ensure they were not unwittingly servicing Wagner-affiliated entities by improving due diligence.

It said:

• “This includes identifying and addressing the risks associated with actors at every stage of the supply chain, including shippers, freight forwarders and intermediary banks.
• “By interrupting Wagner’s access to legitimate channels for moving money and goods, its operating costs will significantly increase, reducing its available options for transit and banking, making it more expensive and challenging to sustain its activities.”

A HSBC spokesman said:

• “HSBC is deeply committed to combatting financial crime and to the integrity of the global financial system. We have invested significantly in building and maintaining an effective control framework to detect and mitigate this risk.”

JP Morgan declined to comment.

Source:  

(1) Russian warlord Yevgeny Prigozhin used Western banks for Wagner payments. https://www.msn.com/en-us/money/companies/russian-warlord-yevgeny-prigozhin-used-western-banks-for-wagner-payments/ar-AA1r7tYs.

(2) Wagner Warlord used HSBC and JP Morgan to process payments. https://www.telegraph.co.uk/business/2024/09/24/russian-warlord-yevgeny-prigozhin-western-banks-wagner/.

(3) JPMorgan, Chase, and HSBC unwittingly processed payments for Wagner .... https://www.marketscreener.com/quote/stock/JPMORGAN-CHASE-CO-37468997/news/JPMorgan-Chase-and-HSBC-unwittingly-processed-payments-for-Wagner-warlord-Prigozhin-FT-47932783/.