Big bad Rep. Jeb Hensarling chaired a July 11, 2016 Republican staff report about 2012 HSBC events.
HSBC Greenmail: 7/3/2007, "HSBC is providing customers with a conscience the opportunity to take advantage of a host of green banking options."
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7/11/16, "HSBC avoided US money laundering charges because of 'market risk' fears," BBC
"US officials refused to prosecute
HSBC for money laundering in 2012 because of concerns within the
Department of Justice that it would cause a "global financial disaster",
a report says.
The report alleges the UK "hampered" the probe and "influenced" the outcome.
HSBC was accused of letting drug cartels use US banks to launder funds.
The bank, which has its headquarters in London, paid a $1.92bn (£1.48bn) settlement but did not face criminal charges. No top officials at HSBC faced any charges.
'Serious implications'
The report says: "George Osborne, Chancellor of the Exchequer, the UK's chief financial minister, intervened in the HSBC matter by sending a letter to Federal Reserve Chairman Ben Bernanke...to express the UK's concerns regarding US enforcement actions against British banks."The letter said that prosecuting HSBC could have "very serious implications for financial and economic stability, particularly in Europe and Asia".
Justice Department spokesman Peter Carr said a series of factors were considered when deciding how to resolve a case, including whether there may be "adverse consequences for innocent third parties, such as employees, customers, investors, pension holders and the public".
The report also accuses former US Attorney General Eric Holder of misleading Congress about the decision. The report says Mr Holder ignored the recommendations of more junior staff to prosecute HSBC because of the bank's "systemic importance" to the financial markets.
'Misleading comments'
"Rather than lacking adequate evidence to prove HSBC's criminal conduct, internal Treasury documents show that DOJ [Department of Justice] leadership declined to pursue [the] recommendation to prosecute HSBC because senior DOJ leaders were concerned that prosecuting the bank 'could result in a global financial disaster'," the report said.Instead, the Department of Justice and HSBC reached the settlement, which some politicians criticised for being too lenient.
Testifying before Congress in 2013 Mr Holder said the size of some financial institutions can make it difficult to bring criminal charges.
He later tried to clarify those remarks telling Congress: "If we find a bank or a financial institution that has done something wrong, if we can prove it beyond a reasonable doubt, those cases will be brought."
Congress's report deemed these comments to be misleading in light of emails from Treasury Department staff that recommended criminal charges.
Mexican cartel
The 2012 settlement with HSBC detailed how the bank violated US sanctions by conducting business for customers in Iran, Libya, Sudan, Burma and Cuba.HSBC accounts were also used by the Sinaloa drug cartel in Mexico and Norte del Valle cartel in Colombia to launder $881m. The settlement allowed the bank to avoid pleading guilty to any wrongdoing.
If HSBC had been proven guilty of criminal action, it could have lost its banking charter in the US.
HSBC and US regulators declined to comment on the report.
The UK Treasury has not commented either."
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July 2013: 2012 US settlement was overseen by Loretta Lynch who was rewarded for playing ball by being promoted to US Attorney General:
7/3/2013, "HSBC Judge Approves $1.9 B Drug-Money Laundering Accord," Bloomberg
"The 2012 settlement was overseen by Loretta Lynch who was then US Attorney for the Eastern District of New York. Lynch is currently Barack Obama’s current nominee for attorney general....
HSBC global and its US bank was forced to pay a $1.9bn fine...after the DoJ uncovered evidence HSBC subsidiaries had enabled clients to breach US sanctions against Cuba, Sudan and Iran and, due to oversight failures, allowed Mexican drug cartels launder billions of dollars.
That deal was unveiled in December 2012, six months after a damning investigation into HSBC global and its US affiliate by the Senate permanent subcommittee for investigations. The deferred prosecution agreement made no mention of evidence of tax evasion connected to HSBC’s Swiss banking division, even though the US government had received the leaked data two years earlier....
At the time, the HSBC settlement was heavily criticised by both Republicans and Democrats for allowing the bank to escape criminal indictments and keep the charter which enables it to operate in the US. Lynch and other senior DoJ officials defended the deal, pointing out it committed HSBC to a five-year plan to stamp out money laundering and other illicit practices, an ongoing process that is being overseen by an independent, court-appointed monitor."...
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Feb. 2015: Swiss police raid HSBC Geneva office for criminal money laundering following news that HSBC clientele included illegal arms dealers and blood diamond traders. HSBC chief during 1000+ tax evasion cases was promoted to UK Conservative peer and Minister of Trade and Investment-BBC
2/18/2015, "Swiss police raid HSBC's Geneva office," BBC
"Swiss prosecutors are searching offices of the Geneva subsidiary of HSBC bank in an inquiry into alleged money-laundering.
The investigation could be extended to people suspected of committing or participating in money laundering....
The raid comes more than a week after allegations first emerged that HSBC's Swiss private bank may have helped wealthy clients evade tax.
HSBC published a full-page advert in several weekend papers containing an apology over the claims.
The chief executive of HSBC's Swiss private bank, Franco Morra, said last week it had shut down accounts from clients who "did not meet our high standards".
Mr Morra added the revelations about "historical business practices" were a reminder that the old business model of Swiss private banking was no longer acceptable.
Criminal investigation
HM Revenue and Customs was given the leaked data in 2010 and has identified 1,100 people who had not paid their taxes.
Last week, HSBC admitted that it was "accountable for past control failures", but said it had now "fundamentally changed".
"We acknowledge that the compliance culture and standards of due diligence in HSBC's Swiss private bank, as well as the industry in general, were significantly lower than they are today," it added.
The bank faces criminal investigations in the US, France, Belgium and Argentina, but not in the UK, where HSBC is based.
HSBC said it was "co-operating with relevant authorities".
Offshore accounts are not illegal, but many people use them to hide cash from the tax authorities.
And while tax avoidance is perfectly legal, deliberately hiding money to evade tax is not.
The allegations have caused a political storm in the UK over who knew what and when.
The leaked data was not received by the government until 2010 by which time the coalition had taken power, but refers to tax evasion that took place under the last Labour government between 2005 and 2007.
The man in charge of HSBC at the time, Stephen Green, was made a Conservative peer and appointed to the government.
Lord Green was made a minister eight months after HMRC had been given the leaked documents from his bank. He served as a minister of trade and investment until 2013.
Shadow chancellor Ed Balls has written to the chancellor accusing him of keeping quiet about the HSBC revelations.
But Treasury sources said George Osborne had given several interviews in the last few days on the matter, and that there was nothing new in Labour's letter."
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Aug. 2013:
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"Organized crime on this scale...cannot exist without political protection....Americans are being denied their constitutional right to national security....Congress must abandon their focus on rewarding illegal behavior for millions of persons by the grant of amnesty in favor of protecting American citizens who suffer daily at the hands of these seasoned criminals,” they wrote. “To do otherwise makes a mockery of our laws, and encourages countless millions more from around the globe to do the same. Transnational organized crime nationwide has flourished under these conditions.”"
8/7/2013, "Ex-Border Patrol Agents Warn: Politicians Helping Cartels in U.S.," Breitbart, Matthew Boyle
"In an open letter to the public in late July, several retired Border Patrol agents wrote on behalf of the National Association of Former Border Patrol Officers to warn that Mexican drug cartels are actively operating inside the United States spending millions every year to try to build their networks here.
They argued that American politicians are protecting their activities as well.
“Transnational criminal enterprises have annually invested millions of dollars to create and staff international drug and human smuggling networks inside the United States; thus it is no surprise that they continue to accelerate their efforts to get trusted representatives in place as a means to guarantee continued success,” the Border Patrol agents wrote.
“We must never lose sight of the fact that the United States is the market place for the bulk of transnational criminal businesses engaged in human trafficking and the smuggling, distribution and sale of illegal drugs. Organized crime on this scale we are speaking about cannot exist without political protection.”
Gene Wood, a retired Border Patrol agent who once ran the agency’s San Diego station; William Glenn, a retired Border Patrol southwest region Chief Intelligence Agent; and Claude Guyant, another retired Border Patrol agent who served in leadership positions throughout the agency in his time there, all signed the letter.
“Most heroin, cocaine, meth, and marijuana marketed in the United States is produced outside of our country, and then smuggled into the United States,” they wrote. “The placement of trusted foreign employees inside the United States is imperative to insure success in continuing to supply the demand, and returning the profits to the foreign organization. Members of these vicious transnational crime syndicates are already well established in more than 2,000 American cities and their numbers are increasing as networks expand and demands accelerate. These transnational criminals present a real and present danger to all Americans, and they live among us.”
As Breitbart News’ Brandon Darby reported on Wednesday, cartels are recruiting American teens, prison gang members and military members to become assassins for their organizations.
After they have been recruited and become part of these transnational criminal organizations, according to the former Border Patrol agents, those teens “are absolutely controlled and totally committed members of foreign drug cartels who have demonstrated an ability and willingness to follow the business model of criminal enterprise which is simply to supply the demand for illegal drugs and aliens in the United States and return the profits to their handlers abroad, at any cost.”
“Sanctuary cities established throughout the United States discourage even the most basic law enforcement initiatives within their boundaries against these predatory criminals,” they wrote.
“Encouraged by Congress and a disinterested mainstream news media, these havens deny the American public their constitutional right to national security and public safety while providing relative safety for dangerous foreign criminals.”
The retired Border Patrol agents called on Congress to abandon efforts to grant amnesty to illegal aliens because passing an amnesty would be akin to abetting the drug cartels.
Congress must abandon their focus on rewarding illegal behavior for millions of persons by the grant of amnesty in favor of protecting American citizens who suffer daily at the hands of these seasoned criminals,” they wrote. “To do otherwise makes a mockery of our laws, and encourages countless millions more from around the globe to do the same. Transnational organized crime nationwide has flourished under these conditions.”"
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July 2012: US Treasury Dept. allowed HSBC financing of drug cartels and terrorists to continue for years. Only objection now is "inadequate paperwork:"
7/17/2012, "HSBC Has Not Been Fined For Money Laundering," Forbes, T. Worstall
"Nor has it been fined for allowing terrorist financing or drug trafficking. What HSBC has been fined for is something which in the eyes of the bureaucracy is worse: and in the eyes of pretty much everyone else less bad. HSBC has been fined for not running the bureaucratic system necessary to ensure that there is no money laundering, terrorist financing etc.
From the Senate press release on today’s events:
WASHINGTON – "Global banking giant HSBC and its U.S. affiliate exposed the U.S. financial system to a wide array of money laundering, drug trafficking, and terrorist financing risks due to poor anti-money laundering (AML) controls, a Senate Permanent Subcommittee on Investigations probe has found.
The important word in there, the vital word, is “risks”.
“In an age of international terrorism, drug violence in our streets and on our borders, and organized crime, stopping illicit money flows that support those atrocities is a national security imperative,” said Sen. Carl Levin, D-Mich., subcommittee Chairman. “HSBC used its U.S. bank as a gateway into the U.S. financial system for some HSBC affiliates around the world to provide U.S. dollar services to clients while playing fast and loose with U.S. banking rules. Due to poor AML controls, HBUS exposed the United States to Mexican drug money, suspicious travelers cheques, bearer share corporations, and rogue jurisdictions. The bank’s federal bank regulator, the OCC, tolerated HSBC’s weak AML system for years. If an international bank won’t police its own affiliates to stop illicit money, the regulatory agencies should consider whether to revoke the charter of the U.S. bank being used to aid and abet that illicit money.”
The important word out of Senator Levin’s mouth there is “exposed”.
HSBC did not have sufficiently robust internal audit and verification systems to be able to prove that the transactions it was undertaking were not money laundering, terrorist financing or aiding the financing of the drugs trade. This is, and I’m sure you will agree, rather different from actually allowing or doing any of those things.
Those things may even have happened as well: but that isn’t why HSBC has been fined. Their paperwork was inadequate: that is why they were fined."
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7/16/2012, "HSBC Helped Terrorists, Iran, Mexican Drug Cartels Launder Money, Senate Report Says," Forbes, Fontevecchia
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7/16/2012, "Senate report: HSBC 'allowed drug money laundering'," BBC
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March 2013-HSBC again caught in criminal money laundering:
3/18/2013, "HSBC faces new money laundering claims in Argentina," BBC
"Banking giant HSBC, which was hit with a US fine for money laundering last year, is facing fresh accusations of illegal activity in Argentina.
Argentina has alleged that the bank used "fake receipts" to facilitate money laundering and tax evasion, and launder 392m pesos ($77m; £50m).
The country's tax authority said it had filed criminal charges against HSBC. HSBC said that it would cooperate with the investigation, adding that the allegations were "of great concern"....
Last year, HSBC agreed to pay US authorities $1.9bn (£1.2bn) in a settlement over money laundering, the largest paid in such a case."...
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Greenmail works! Get out of jail free:
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7/3/2007, "HSBC is providing customers with a conscience the opportunity to take advantage of a host of green banking options." moneynews.co.uk
1/15/2008, "HSBC tops green banking list."
1/11/2008, "HSBC, Other European Banks Receive Top Scores in First-Ever Ranking of 40 Leading Banks on Climate Change Strategies," CSRwire (Corporate Social Responsibility)
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Feb. 2015
HSBC protected accounts of "arms dealers, dictators' associates, diamond smugglers and other "outlaws".
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2/18/2015, "Raid on HSBC's Private Bank in Switzerland," Sky News
"Prosecutors in Switzerland have launched an
investigation into allegations of money laundering at HSBC's Swiss
private banking arm.
Geneva's prosecutors said that the premises of HSBC Private Bank (Switzerland) in the city were being searched.
A statement said: "Following the recent revelations related to the HSBC Private Bank (Switzerland), the public prosecutor announces the opening of a criminal procedure against the bank ... for aggravated money laundering."
The prosecutors said that although the probe was against the bank itself, the direction it would take may be widened to include individuals "suspected of committing or participating in acts of money laundering".
The announcement came just over a week after HSBC Switzerland found itself at the centre of a global scandal following the publication of secret documents.
The cache of files, made public in a French newspaper, claimed HSBC's Swiss private banking arm helped clients in more than 200 countries evade taxes on accounts containing £77bn ($119bn).
The files, which include the details of 30,000 accounts and the names of celebrities, were originally stolen by former HSBC IT worker Herve Falciani in 2007....
The International Consortium of Investigative Journalists (ICIJ), which analysed the list for the Le Monde newspaper, said accounts were held by arms dealers, dictators' associates, diamond smugglers and other "outlaws".
According to the files, the bank's clients included former and current politicians from Britain, Russia, India and a number of African countries.
Those named in the files include people sanctioned by the US, such as Turkish businessman Selim Alguadis and Gennady Timchenko, an associate of Russian President Vladimir Putin who was the subject of sanctions over the Ukraine crisis.
A statement from HSBC said: "We have co-operated continuously with the Swiss authorities since first becoming aware of the data theft in 2008 and we continue to co-operate."
Last week, the CEO of HSBC's Swiss private bank Franco Morra said it had shut down accounts from clients who "did not meet our high standards" and that the revelations about "historical business practices" were a reminder that the old model of Swiss private banking was no longer acceptable."
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