HSBC was guilty of a “blatant failure” to implement anti-money laundering controls and wilfully flouted US sanctions, American prosecutors said, as the bank was forced to pay a record $1.9bn (£1.2bn) to settle allegations it allowed terrorists to move money around the financial system.
“Most money laundering experts can recount the 1980s in Miami when drug traffickers would walk into banks with duffel bags full of dirty cash and complicit bankers would accept the deposits, no questions asked. In essence, a very similar scenario played out in the 2000s as branches of the Mexico unit of HSBC took in massive sums of U.S. dollars (money that ultimately was shipped back to the United States for deposit with the Fed) without taking steps to ensure the cash was the product of legitimate commerce.”
Federal and state authorities have chosen not to indict HSBC, the London-based bank, on charges of vast and prolonged money laundering, for fear that criminal prosecution would topple the bank and, in the process, endanger the financial system.
“HSBC is being held accountable for stunning failures of oversight – and worse,” said Breuer, “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.”
In the latest embarrassment for Britain’s banks, Gulliver said: “We accept responsibility for our past mistakes. We have said we are profoundly sorry for them, and we do so again,” he said, insisting Britain’s biggest bank was “a fundamentally different organisation” now.
Europe’s greatest bank paid a $1.9 billion fine and went into the five-year bargain in 2012 for neglecting to keep Mexican drug cartels from laundering a huge sum of dollars (hundreds of millions).
If you’re suspected of drug involvement, America takes your house; HSBC admits to laundering cartel billions, loses five weeks’ income and execs have to partially defer bonuses
“While we still have improvements to make and work to do, this shows the DPA has worked in the way intended which was to lead to a transformation in the way HSBC manages financial crime risk,” Stuart Levey, Chief Legal Officer at HSBC, said.
As a result of the government’s investigation, HSBC has . . . “clawed back” deferred compensation bonuses given to some of its most senior U.S. anti-money laundering and compliance officers, and agreed to partially defer bonus compensation for its most senior officials during the five-year period of the deferred prosecution agreement.