Wednesday, July 18, 2012

A Criminal Investment

From Yahoo news....

A US report has found that lax controls at HSBC, Europe's largest bank, meant Mexican drug cartels were able to launder billions of dollars for seven years. The investigation by the Senate also says US regulator knew HSBC Holdings PLC had a poor system to detect problems but failed to take action.

The report by the Senate Permanent Subcommittee also found that some bank affiliates skirted US government bans on financial transactions with Iran and other countries. And HSBC's US division provided money and banking services to some banks in Saudi Arabia and Bangladesh believed to have helped fund al Qaeda and other terrorist groups. HSBC released a statement saying its executives will offer a formal apology at a hearing into the matter on Tuesday.
"We will apologise, acknowledge these mistakes, answer for our actions and give our absolute commitment to fixing what went wrong," the bank said in a statement.

The US Justice Department said it is conducting a criminal investigation into HSBC's operations but declined to confirm that the bank is in settlement talks.
HSBC's net income last year was £10.7bn ($16.8bn). It operates in about 80 countries around the world. Its US division is among the top 10 banks operating in the United States. It has assets of roughly £134bn ($210bn) in its US operations.

Money laundering takes profits from the trafficking of drugs, arms or other illicit activities and passes them through bank accounts to disguise the illegal activity. The bank used its US operation as a "gateway" into the country's financial system for other HSBC affiliates, Senator Carl Levin, the subcommittee's chairman said. Because of lax controls against money laundering, HSBC Bank USA "exposed the United States to Mexican drug money" and other suspicious funds, Mr Levin said. The report says the drug cartels laundered money through the bank's US division from 2002 through 2009.

"In an age of international terrorism, drug violence in our streets and on our borders, and organised crime, stopping illicit money flows that support those atrocities is a national security imperative," Mr Levin said.

The bank said in its statement that it changed its senior management last year and has made changes to strengthen its compliance with rules to prevent money laundering. "We...recognise that our controls could and should have been stronger and more effective in order to spot and deal with unacceptable behaviour," the statement said.


HSBC - The World's Local Bank.

For thieves, drug lords, cartels, money launderers, criminals........

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