The London-based bank accused of violating U.S. sanctions against doing business with Iran has rejected the allegations, saying it already had been cooperating in a review with U.S. regulators.
A statement by Standard Chartered Bank says it voluntarily approached U.S. agencies -- including the New York State Department of Financial Services -- in January 2010 with disclosures about transactions with Iran from 2001 to 2007.
The bank says records show it sought to comply and "overwhelmingly did comply" with all U.S. regulations to prevent funding for Iran's nuclear program and terrorist groups.
The bank says it was surprised by accusations made on August 6 by Benjamin Lawsky, the New York State Financial Services Superintendent.
Lawsky said Standard Chartered Bank schemed with Iran's government to launder $250 billion from 2001 to 2007, leaving the U.S. financial system "vulnerable to terrorists."
Lawsky said a nine month investigation that involved looking through more than 30,000 pages of documents -- including internal emails from Standard Chartered Bank -- the bank reaped "hundreds of millions of dollars in fees."
The bank, which operates globally, was threatened with the possible suspension of its license to operate in New York -- the hub of the U.S. financial industry -- if it cannot explain the transactions.
The allegations also have dragged a global accounting and consulting firm, Deloitte, into the spotlight of another scandal.
The New York State Department of Financial Services says Deloitte consultants hid details from regulators about Standard Chartered Bank's transactions with Iranian clients.
It said Deloitte "intentionally omitted critical information" in a report to regulators on its independent review of the bank. The review was done by Deloitte's financial services advisory group, which is separate from its auditing arm.
At one point, Lawsky said, Standard Chartered asked Deloitte to delete from its draft report any reference to payments that could reveal the bank's practices involving Iranian entities.
Lawsky cited an email about the draft report in which a Deloitte partner said "we agreed" to Standard Chartered Bank's request because "this is too much and too politically sensitive for both Standard Chartered Bank and Deloitte. That is why I drafted the watered-down version."
Lawsky says that by using Deloitte's "watered-down" report and fraudulent data, Standard Chartered misled New York banking regulators into believing it had corrected flaws, while the opposite was true.
Lawsky also said that Deloitte unlawfully gave Standard Chartered confidential reports that Deloitte had prepared for two other major foreign banking clients under investigation for money laundering.
He said those reports had "detailed and highly confidential information concerning foreign banks involved in illegal U.S. dollar clearing activities."
Deloitte said in a statement: "Deloitte Financial Advisory Services performed its role as independent consultant properly and had no knowledge of any alleged misconduct by bank employees. Allegations otherwise are unsupported by the facts."
In 2011, Deloitte lost part of a contract to provide technical assistance to Afghanistan's central bank after failing to report signs of fraud at the private Kabul Bank before a run on that financial institution in September 2010.
The U.S. Agency for International Development had funded the contract to promote the stability of Afghanistan's financial sector and prevent losses.
Deloitte was not working for Kabul Bank. But a USAID inspector general's report said Deloitte "did not aggressively follow up on indications of serious problems" at Kabul Bank.
With reporting by Reuters, AP, and AFP