When I read Frederick Forsyth,’s Book ‘The Cobra‘ the money laundering operations were so vivid,as in the case of acquiring a False Passport in ‘The Day of The Jackal‘, I. suspected HSBC.
Please read the book , you will know what I mean.
All International banks which appear to be perfectly legitimate regularly indulge in these activities.
Despite sound bites nothing may come of this investigation .
HSBC: THE DAMNING FINDINGS
The focus of the Senate probe was HSBC’s U.S. operations, which has its main office in New York.
HSBC used the U.S. unit as a selling point to clients outside the United States, touting its ability to handle U.S. dollar transactions.
Among HSBC’s problems, the report described the bank’s compliance division failed to investigate the suspect money.
High turnover of top compliance officials made it difficult for reform to take hold, the report said. Employees were ‘overwhelmed’ by a mounting number of suspect transactions that needed review.
‘We’re strapped and getting behind in investigations,’ one bank official wrote in June 2008.
By that time, HSBC was cutting costs to offset losses tied to subprime home loans and the brewing financial crisis.
In 2010, one disgusted top compliance official threw up his hands and quit after less than a year on the job, according to the report.
Typical of the problems inside the bank were transactions tied to Mexico, a country the report said is ‘under siege from drug crime, violence and money laundering’.
HSBC, according to the report, helped move money for a Mexican foreign-exchange dealer called Casa de Cambio Puebla that served as a hub for laundered proceeds, according to the report.
Between 2005 and 2007, there was a ‘growing flood’ of U.S. dollars moving between the exchange house and HSBC, setting off red flags inside HSBC.
Some bankers said the transfers were legal. One said the money came from Mexican landscapers working in the United States and routing money back home to their families.
HSBC ultimately closed the account in November 2007 after it received a seizure warrant from the Mexican attorney general seeking money tied to the exchange dealer, the Senate report said.
“In April 2003, the Federal Reserve Bank of New York and New York state bank regulators cracked the whip on HSBC Bank USA, ordering it to do a better job of policing itself for suspicious money flows. Staff in the bank’s anti-money laundering division, according to a person who worked there at the time, flew into a “panic.”
The U.S. unit of London-based HSBC Holdings Plc quickly rallied. It hired a tough federal prosecutor to oversee anti-money laundering efforts. It installed monitoring systems for operations that had grown unwieldy during the bank’s U.S. expansion. The aim, as HSBC said in an agreement with regulators at the time, was to “ensure that the bank fully addresses all deficiencies in the bank’s anti-money laundering policies and procedures.”
Nearly a decade later, the effort has failed to satisfy law-enforcement officials.
The extent of that failure is laid out in confidential documents reviewed by Reuters that originate from investigations of HSBC’s U.S. operations by two U.S. Attorneys’ offices.
These documents allege that from 2005, the bank violated the Bank Secrecy Act and other anti-money laundering laws on a massive scale. HSBC did so, they say, by not adequately reviewing hundreds of billions of dollars in transactions for any that might have links to drug trafficking, terrorist financing and other criminal activity.
In some of the documents, prosecutors allege that HSBC intentionally flouted the law. The bank created an operation that was a “systemically flawed sham paper-product designed solely to make it appear that the Bank has complied” with the Bank Secrecy Act and is able to detect money laundering, wrote William J. Ihlenfeld II, U.S. Attorney for the Northern District of West Virginia, in a draft of a 2010 letter addressed to Justice Department officials.
In that letter, Ihlenfeld compared HSBC unfavorably to Riggs Bank. In 2004 and 2005, that scandal-plagued Washington bank was fined a total of $41 million after it was found to have violated anti-money laundering laws, and it was acquired by PNC Financial Services.
“HSBC is to Riggs, as a nuclear waste dump is to a municipal land fill,” Ihlenfeld wrote.
The allegations laid out in the Ihlenfeld letter and other documents couldn’t be confirmed. It is possible that subsequent inquiries have led investigators to alter their views of what went on inside HSBC’s compliance operation.
As they are, the documents reviewed by Reuters, combined with regulatory filings, court documents and interviews with current and former HSBC employees, paint a damning portrait of a bank allegedly unable, and unwilling, to police itself or its clients.
HSBC’s U.S. anti-money laundering division – the people charged with ensuring that the bank toes the line of regulators and law enforcement – has experienced high turnover among executives. Since 2005, at least half a dozen overseers have come and gone. Compliance staff also encountered pushback from bankers eager to maintain relationships with lucrative clients whose dealings raised red flags.
In the Miami office – an important center for HSBC’s private-banking and retail operations – a longtime private banker was fired for alleged sexual harassment after he warned compliance officers that clients were engaged in shady dealings.
In one email exchange submitted as evidence in that case, employees debated whether the bank should help a Miami client get around U.S. sanctions by moving the client’s business to HSBC’s Hong Kong office. “I believe that the best outcome would be for the customer to open a relationship with Hong Kong just for leters (sic) of credit purposes. He travels there all the time,” private banker Antonio Suarez wrote in a 2008 email. Suarez has since left the bank and couldn’t be reached for comment.
http://in.reuters.com/article/2012/05/04/us-hsbcusa-probes-idINBRE8420FX20120504
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