The state of New York is accusing U.K.-based Standard Chartered Bank of secretly doing business with Iran, fraudulently racking up hundreds of millions of dollars in fees, all the while dismissing an executive's pleas to straighten out with a dismissal of "you f---ing Americans."

This story has everything: International intrigue, alleged high-level financial crime, and swearing. It also has some serious financial implications for Standard Chartered, much higher than the "catastrophic reputational damage" of which one U.S. banker warned a British colleague (prompting the above rebuke): If the New York State Department of Financial Services proves the charge it leveled Monday, Standard Chartered could lose its license to operate in New York.

The DFS says in a 27-page document that a rogue unit of the bank secretly worked with Iran in order to circumvent U.S. sanctions, using paperwork tricks to move billions of dollars for its covert clients:

For almost ten years, SCB schemed with the Government of Iran and hid from regulators roughly 60,000 secret transactions, involving at least $250 billion, and reaping SCB hundreds of millions of dollars in fees.  SCB’s actions left the U.S. financial system vulnerable to terrorists, weapons dealers, drug kingpins and corrupt regimes, and deprived law enforcement investigators of crucial information used to track all manner of criminal activity.

According to Reuters' Jonathan Stempel and Carrick Mollenkamp, the bank allegedly used so-called U-Turn transactions, which moved money "for Iranian clients among banks in the United Kingdom and Middle East and cleared through Standard Chartered's New York branch, but which neither started nor ended in Iran." It circumvented rules banning those transactions by writing "no name given" or "not stated" in fields that would identify its Iranian clients, the department says.

But the quote going toward the top of many news stories about this comes not from the DFS's own damning language, but from an email exchange the charging document cites, between a U.S. executive of the bank to its group executive director. In 2006, the bank's CEO of the Americas wrote to the group executive director that the bank was opening itself up to "catastrophic reputational damages" and possible "serious criminal liability" for hiding the transactions. In response, the British executive wrote: "You f---ing Americans.  Who are you to tell us, the rest of the world, that we’re not going to deal with Iranians." 

U.S. regulators have some answers to that now: They're the ones who can make it very difficult for Standard Chartered to make money here, as Reuters' Stempel and Mollenkamp explain: "New York banking licenses let foreign banks operate a hub to handle transactions in U.S. dollars, the world's most widely-used currency. Without that hub, a bank would lose access to the dollar markets." The threat of losing that license carries a lot more financial penalty than any amount of "reputational damage," that's for sure.