Jul 19

HSBC: Money Laundering for Drug Dealers & Terrorists

(10 am. – promoted by ek hornbeck)

Cross posted from The Stars Hollow Gazette

As if rate fixing wasn’t bad enough, HSBC, Europe’s largest bank, has been caught laundering money for Mexico, Iran and Syria:

The bank failed to monitor a staggering £38trillion of money moving across borders from places that could have posed a risk, including the Cayman Islands and Switzerland. The failures stretched to dealings with Saudi Arabian bank Al Rajhi, which was linked to the financing of terrorism following 9/11.

HSBC’s American arm, HBUS, initially severed all ties with Al Rajhi. But it later agreed to supply the Saudi bank with US banknotes after it threatened to pull all of its business with HSBC worldwide.

According to the report, HBUS also accepted £9.6billion in cash over two years from subsidiaries without checking where the money came from.

In one instance, Mexican and US authorities warned HSBC that £4.5billion sent to the US from its Mexican subsidiary ‘could reach that volume only if they included illegal drug proceeds’. [..]

The Senate probe also examined banking HSBC did in Saudi Arabia with Al Rajhi Bank, which the report said has links to financing terrorism.

Evidence of those links emerged after the Sept 11, 2001 attacks on the United States, the Senate report said, citing U.S. government reports, criminal and civil legal proceedings and media reports. [..]

Some of the money that moved through HSBC was tied to Iran, the report said, which would violate U.S. prohibitions on transactions tied to it and other sanctioned countries.

To conceal the transactions, HSBC affiliates used a method called ‘stripping,’ where references to Iran are deleted from records. HSBC affiliates also characterized the transactions as transfers between banks without disclosing the tie to Iran in what the Senate report called a ‘cover payment.’ [..]

So just how embarrassing is this? Obviously enough that HSBC’s chief compliance officer, David Bagley tendered his resignation during his Senate hearing testimony:

David Bagley, the head of compliance for the British bank since 2002, broke from his prepared testimony to tell the Senate Permanent Subcommittee on Investigations that “now is the appropriate time for me and for the bank for someone new to serve as the head of group compliance.”

They don’t need no stinking regulation, that might hurt those “job creators.”  


    • TMC on July 19, 2012 at 9:22 pm
    • RUKind on July 21, 2012 at 7:24 am

    I can’t imagine that they didn’t. What if a part of Mitt’s fortune was financed by illicit money? Could that be why he’s so afraid to release those returns?

    I saw somewhere in the last few days that Panamanian money was used as early seed for Bain Capital. Panamanian money is notoriously dirty.

    The story is out there in threads and bits and pieces. The offshoring and outsourcing may be the most benign aspects of it.

    Might Bain have invested or whitewashed narcoterrorist or islamoterrorist money? I wouldn’t put either past any of our TBTF banks. Why not Bain, too?

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