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HSBC: Preferred Bank Of Drug Cartels & Money Launderers

Why no criminal charges in HSBC case?

Excellent report from tonight's CBS national news broadcast.


(CBS News) As bank slogans go, they don't come worse than this: "The preferred financial institution of drug cartels and money launderers."

That's a quote Tuesday in a U.S. Department of Justice report about HSBC Holdings, one of the largest banks in the world.  To avoid criminal prosecution, HSBC admitted Tuesday that it laundered more than $800 million for Mexican drug cartels, and covered up illegal transactions for Burma, Iran, Sudan, Cuba, and Libya.

The British bank will pay $1.9 billion to the U.S. government, the largest such fine in history.

It's a case that has everything -- everything accept an arrest.  That struck some as odd, because in 80 pages of court documents, the bank admits to almost going out of its way to act as a financial clearing house for international pariahs and drug dealers.

Assistant Attorney General Lanny Breuer said: "HSBC is paying a heavy price for its conduct, and under the terms of today's agreement, if the bank fails to comply with the agreement in any way, any way at all, we reserve the right as the government to fully prosecute it."

Under the terms of Tuesday's settlement, nobody at HSBC will face criminal charges.

Notre Dame professor Jimmy Gurule, who investigated money-laundering cases for the Treasury Department, said: "We're not talking about mere negligence. We're talking about a criminal scheme that was adopted as a policy of HSBC that involved looking the other way in regard to suspicious transactions involving money laundering."

Some would say that the message is, if you break all the laws you can, until you get caught, you may have to pay a lot of money, but you're not gonna go to jail.

U.S Attorney Lynch, who is one of the architects of Tuesday's settlement, disputed that idea, and said: "That's a very short-sighted view, I think, because in this case they're obviously paying a great deal of money, but they also have to literally had to turn their company inside out.  And the message should be that that's what you have to do."

As for the lack of criminal prosecutions, the feds said that they never found one bank official, or any collection of bank officials acting together, that were doing this on purpose.  They painted a picture of a disorganized bank that was collecting all these fees either not knowing, or not wanting to know where it all came from.


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Reader Comments (16)

They fired the guys and took their bonuses. I guess the tellers who were taking the money through the drive ins were too scared to say anything and I am certain that all the camera footage with all these transactions have all gone upside down. WTF? Meanwhile, I get a son of bitch speeding ticket going 10 over the posted speed limit taken by a camera and signed off on by Fred Milquetoast and have to pay a fine to Montgomery County. I guess folks, there is nothing that even resembles equity and fairness and all these guys do is have a big chucklefest on our behalf. Just godamnit.
Dec 11, 2012 at 11:15 PM | Unregistered CommenterSKINFLINT
Corporations are people, put the entire company in prison, right down to the tellers.
Dec 12, 2012 at 2:45 AM | Unregistered CommenterRSBL
Our justice system should be immediately arrested and brought up on charges.
Dec 12, 2012 at 5:20 AM | Unregistered Commenterchiller
that is why they mock the goy and call it a CRIMINAL JUSTICE "SYSTEM"....HA HA

DUE PROCESS....you're all Palestinians...NOW.

wanna a cure...KNOW THE TRUTH


how about the chicken feed HUSH money Dick Armey took, to ....go away...?

oh yeah....DOV ZAKHEIM

those braindeadgoy just beg to be plundered....they are so deliberately STOOOOOPID....by CHOICE

Jesus was "Jewish"

what's in your wallet
Dec 12, 2012 at 7:07 AM | Unregistered CommenterAnthony Clifton
Lanny Breuer: "if the bank fails to comply with the agreement in any way, any way at all, we reserve the right as the government to fully prosecute it."

This is ridiculous.

First, if the DOJ won't prosecute HSBC for money laundering, why on earth would anyone believe that the DOJ would prosecute it for breaching an agreement not to launder money? Can the DOJ point to even one prosecution. Grow a set of balls, Breuer, and tell the people what's really going on here: you're handing out get-out-of jail cards for free to your criminal banker buddies.

Let's be honest here. Breuer's entire rationale for not prosecuting big banks is that doing so will destabilize the financial system. And yet his claim here is just the opposite: that he WILL prosecute HSBC if they break the law again.

So which statement is a lie, Lanny Breuer? That prosecution will destabilize the financial system? Or that you will prosecute? They both can't be true.

Second, the government has a rich history of NOT prosecuting recidivists, even when they're in clear breach of an agreement not to engage in specified behavior. The S.E.C., for instance, settles its cases just like the DOJ does: with a fine and an agreed sin-no-more injunction. However, a "New York Times analysis of enforcement actions during the last 15 years found at least 51 cases in which 19 Wall Street firms had broken antifraud laws they had agreed never to breach again."

The DOJ, along with its non-prosecution agreements, is a total farce.
Dec 12, 2012 at 10:30 AM | Registered CommenterCheyenne

Link to NYT quote above.

Also, here's what Jonathan Weil says:

"Too big to fail has turned equal justice under the law into a mockery."

Dec 12, 2012 at 10:32 AM | Registered CommenterCheyenne

Bill Black chimes in on HSBC non-prosecution.


Includes more quotes from Breuer as well.
Dec 12, 2012 at 10:47 AM | Registered CommenterDailyBail
Interesting series of quotes from the NPR piece:

"Court documents showed that the bank let over $200 trillion between 2006 and 2009 slip through relatively unmonitored, including more than $670 billion in wire transfers from HSBC Mexico, making it a favorite of drug cartels and money launderers."

"In July, a Senate subcommittee on investigations criticized HSBC for lax controls that allowed money laundering."

So HSBC executves were aware of the likelihood that their bank laundered drug money, and yet the nation's top law enforcer concludes:

Breuer "said no criminal charges would be brought unless it could be proved that executives purposely tried to let criminal organizations launder money."

In other words, Breuer's message to bank executives is that even when you know your bank is committing crimes involving trillions of dollars, just put your head in the sand and everything will be cool.

And when specifically confronted with an out-of-control bank funneling trillions of dollars into drug deals, Breuer concludes: "Our goal is not to bring HSBC down."

That's our Justice Department: we've let the drug dealers get so big that now we're just going to let them run amok.
Dec 12, 2012 at 11:10 AM | Registered CommenterCheyenne
Chiller you win Best Comment on the article award in my opinion! It's obama's DOJ that should be bringing prosecutions but doesn't!

Five Senior Goldman Sachs Execs Gave $130K To 'Obama Victory Fund' WHILE Eric Holder Was Deciding Whether To File Criminal Charges


HSBC Report Should Result in Prosecutions, Not Just Fines, Say Critics

Dec 12, 2012 at 1:10 PM | Unregistered CommenterLadyLiberty

Drug money saved banks in global crisis, claims UN advisor



Drugs money worth billions of dollars kept the financial system afloat at the height of the global crisis, the United Nations' drugs and crime tsar has told the Observer.

Antonio Maria Costa, head of the UN Office on Drugs and Crime, said he has seen evidence that the proceeds of organised crime were "the only liquid investment capital" available to some banks on the brink of collapse last year. He said that a majority of the $352bn (£216bn) of drugs profits was absorbed into the economic system as a result.

This will raise questions about crime's influence on the economic system at times of crisis. It will also prompt further examination of the banking sector as world leaders, including Barack Obama and Gordon Brown, call for new International Monetary Fund regulations. Speaking from his office in Vienna, Costa said evidence that illegal money was being absorbed into the financial system was first drawn to his attention by intelligence agencies and prosecutors around 18 months ago. "In many instances, the money from drugs was the only liquid investment capital. In the second half of 2008, liquidity was the banking system's main problem and hence liquid capital became an important factor," he said.

Some of the evidence put before his office indicated that gang money was used to save some banks from collapse when lending seized up, he said.

"Inter-bank loans were funded by money that originated from the drugs trade and other illegal activities... There were signs that some banks were rescued that way." Costa declined to identify countries or banks that may have received any drugs money, saying that would be inappropriate because his office is supposed to address the problem, not apportion blame. But he said the money is now a part of the official system and had been effectively laundered.

Stay tuned...
Feb 16, 2013 at 4:47 PM | Unregistered Commenterjohn
What Cocaine Trafficking Says About Emerging Market Opportunities



The IMF recently did a study on Peruvian cocaine production that confirmed what everyone already instinctively knew: illegal drugs make a lot of money for the organizations that traffic and sell them. The illicit cocaine trade, like most mafia activities, enjoys profit margins that are far higher than what can be found in virtually any legal industry for several very obvious reasons:
Feb 16, 2013 at 5:51 PM | Registered CommenterJohn



Abstract: Globalization has led to an increase in commercial activities running on the illegal markets, its dynamics being largely determined by the balance between profitability and the major risks involved. Revenues are significant, one example being those obtained from drug industry. In recent years, illicit drug trafficking has seen in Romania an unprecedented escalation, as a result of market liberalization and the movement of per sons and because of the extending the phenomenon both among producers and consumers.
This article examines the size of the Romanian illegal drug markets, the countries of origin and drug transit routes, as well as the profits made by the drug trafficking networks...

In Romania, the transport of  illegal drugs takes place using the infrastructure available to private companies specializing in international freight transport (companies managed by Turkish nationals or domestic companies) and through the concealment of these activities as legitimate commercial transactions (for instance the export of oil products or perishable food).
Feb 16, 2013 at 5:55 PM | Registered CommenterJohn
5 Outrageous Revelations from Matt Taibbi's Takedown on HSBC's Drug Money Laundering
In the latest issue of Rolling Stone, Taibbi takes on the most criminal bank yet.

Feb 16, 2013 at 9:00 PM | Unregistered Commenterjohn
Daily: Company suspected of criminal gang ties in anti-drug police bribery case

The company involved in a bribery case being brought against Jari Aarnio, head of the Helsinki police drug squad, is suspected of ties to a notorious criminal group in Finland, reports the daily Helsingin Sanomat Sunday.



The mainstream daily Helsingin Sanomat reported that the equipment supplier Trevoc is partly owned by an investment company established by a close relative of the ringleader of the United Brotherhood crime gang.

According to the daily, Trevoc sold surveillance equipment to the police, and is partly owned by an investment company set up by the sister of the head of the United Brotherhood.

The daily also reported that the head of the crime group had also maintained a close relationship with accused anti-drug chief Jari Aarnio for a number of years.

The Helsinki District Court took Aarnio and three other men into custody on suspicion of accepting bribes and a conflict of interest. One of the detainees is a petty officer in the Finnish Security Police, Supo.


Here is what Trevoc does in the US and is incorporated in Delaware.


Trevoc is a Finnish professional intelligence gathering and surveillance solutions provider for homeland security market in Europe and US.
Trevoc products are in constant use in the professional law enforcement segment, providing users smooth and secure flow of information from various hostile environments. Cost effective and secure surveillance information helps law enforcement agencies (LEA)and intelligence organizations to project force in places and events which matters the most.
Many of the Trevoc employees have served in law enforcement or the intelligence segment for decades, enabling Trevoc to combine cutting edge technology and solid operative experience. Clients of the company include LEAs, intelligence agencies as well as other professional organizations.
Dec 27, 2013 at 11:47 AM | Unregistered Commenterjohn
John, Here is to hoping you have your power back in your home. Seeing reports that they have been slow to get things running up there in Maine. Take Care.
Dec 30, 2013 at 8:38 AM | Unregistered Commenterskinflint
London is now the global money-laundering centre for the drug trade, says crime expert


The City of London is the money-laundering centre of the world’s drug trade, according to an internationally acclaimed crime expert.

UK banks and financial services have ignored so-called “know your customer” rules designed to curb criminals’ abilities to launder the proceeds of crime, Roberto Saviano warned. Mr Saviano, author of the international bestseller Gomorrah, which exposed the workings of the Neapolitan crime organisation Camorra, said: “The British treat it as not their problem because there aren’t corpses on the street.”

His warning follows a National Crime Agency (NCA) threat assessment which stated: “We assess that hundreds of billions of US dollars of criminal money almost certainly continue to be laundered through UK banks, including their subsidiaries, each year.”

Last month, the NCA warned that despite the UK’s role in developing international standards to tackle money laundering, the continued extent of it amounts to a “strategic threat to the UK’s economy and reputation”. It added that the same money-laundering networks used by organised crime were being used by terrorists as well.

Interviewed by The Independent on Sunday, Mr Saviano said of the international drugs trade that “Mexico is its heart and London is its head”. He said the cheapness and the ease of laundering dirty money through UK-based banks gave London a key role in drugs trade. “Antonio Maria Costa of the UN Office on Drugs and Crime found that drug trafficking organisations were blatantly recycling dirty money through European and American banks, but no one takes any notice,” he said. “He found that banks were welcoming dirty money because they need cash, liquidity during the financial crisis. The figures are too big to be rejected …. Yet there was no reaction.”

Referring to HSBC’s record $1.9bn (£1.2bn) US fine for money laundering for the Mexican Sinaloa drugs cartel in 2012, Mr Saviano said: “The biggest UK bank! Yet it has scarcely been written about. The British treat it as not their problem, because there aren’t corpses on the streets.

“They think it’s all happening ‘over there somewhere’, so they needn’t worry about it. Sure, HSBC has been reported but there has been no debate. You need to fill the papers. The intellectuals have said nothing. [David] Cameron has said nothing. It’s his country. How can he say nothing on such a piece of news?”…


I want to show everyone here this white paper regrading money laundering and the 'Know Your Customer", KYC rules. You will find this both fascinating and shocking.

Jul 7, 2015 at 6:44 AM | Unregistered Commenterjohn

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