Federal and state authorities secured a record $1.92 billion payment from HSBC
on Tuesday to settle charges that the banking giant transferred billions of dollars for nations under United States sanctions, enabled Mexican drug cartels to launder tainted money through the American financial system, and worked closely with Saudi Arabian banks linked to terrorist organizations.
The case represents the conclusion of a multiagency investigation that spanned years. It convened the Justice Department, the Manhattan district attorney’s office, bank regulators and the Treasury Department
In a filing in Federal District Court in Brooklyn, federal prosecutors said the bank had agreed to enter into a deferred prosecution agreement and to forfeit $1.25 billion. The four-count criminal information filed in the court charged HSBC with failure to maintain an effective anti-money laundering program, to conduct due diligence on its foreign correspondent affiliates, and for violating sanctions and the Trading With the Enemy Act.
“HSBC is being held accountable for stunning failures of oversight — and worse — that led the bank to permit narcotics traffickers and others to launder hundreds of millions of dollars through HSBC subsidiaries, and to facilitate hundreds of millions more in transactions with sanctioned countries,” Lanny A. Breuer, the head of the Justice Department’s criminal division, said in a statement
At a news conference on Tuesday in Brooklyn, Mr. Breuer defended the decision to opt for a settlement, rather than seeking an indictment against the bank, calling the action “a very just, very real and very powerful result.”
The deal, which required HSBC to admit the accusations leveled by the government agencies, extends for five years. If it errs and violates the terms of the agreement, prosecutors can move to immediately indict the bank.
HSBC, based in Britain, has also agreed to pay the Office of the Comptroller of the Currency
, one of the bank’s central regulators, an additional $500 million
as part of a civil penalty. The Federal Reserve will be paid a $165 million civil penalty
“We accept responsibility for our past mistakes,” Stuart Gulliver, the chief executive of HSBC, said in a statement. “We have said we are profoundly sorry for them, and we do so again. The HSBC of today is a fundamentally different organization from the one that made those mistakes.”
HSBC also entered into a deferred prosecution agreement with the Manhattan district attorney’s office. As part of that agreement, HSBC admitted that it violated New York State law.
To assure that clients from nations under sanctions, like Iran, could funnel cash through the United States without being ensnared by computer filters, HSBC, the Manhattan prosecutor claimed, illegally assisted those nations.
The Manhattan district attorney, Cyrus R. Vance Jr.
, said in a statement: “New York is a center of international finance, and those who use our banks as a vehicle for international crime will not be tolerated.”
Federal and state authorities have been carrying out a broad crackdown to stanch the flow of illegal money across the world. The officials have been working to clamp down on the financing pipeline to cartels and terrorist organizations.
At HSBC, prosecutors unearthed evidence that the bank enabled Mexican drug cartels to launder money into the American financial system.
Problems for HSBC mounted in July when the Senate Permanent Subcommittee on Investigations accused the bank of exposing the United States “financial system to money laundering and terrorist financing risks.”
The original problems began when agents with Immigration and Customs Enforcement
spotted questionable trails of money between HSBC’s Mexican and United States operations.
Despite a chorus of warnings from federal banking regulators about the vulnerability of HSBC’s operations throughout the world, the bank didn’t fortify its controls, the Senate report found.
One HSBC branch in the Cayman Islands, the Senate report said, had virtually no oversight despite holding roughly 50,000 client accounts in 2008. Alarmed, an HSBC compliance officer complained, asking if practices at the bank were part of “the School of Low Expectations Banking.”
William Alden and Ben Protess contributed reporting.
Nothing new as this has been going on for decadesfds. In the original piece that the NY Times ran, it states that Federal and State authorities refused to push for criminal charges, as they feared it would destabilize the Intl. banking system .
After doing further checking, it seems that the only reason they were fined is because going back to 2007, there 60 TRILLION dollars worth of suspicious transactions between 17,000 suspect accounts. I guess they felt obligated this time
This just goes to show that the zionest bankers have been doing their best (and succeding btw), to keep us at war, destabilize our economy, de-value the dollar and undermine the country in every facet of American life.