Drug Cartel Money Laundering in U.S. Is Devastating Unless You’re a Bank
Thursday, July 26, 2012
Senator Carl Levin
Money laundering has been a routine part of global banking giant HSBC for years, according to a Senate investigation that zeroed in on the bank’s U.S. operations.
HSBC Bank USA, N.A., exposed the American financial system to money laundering, drug trafficking, and terrorist financing risks because of its shoddy anti-money laundering (AML) controls, said the Senate Permanent Subcommittee on Investigations.
Senator Carl Levin (D-Michigan), the subcommittee chairman, accused HSBC of “playing fast and loose with U.S. banking rules,” which resulted in Mexican drug money being laundered through domestic accounts.
The bank’s irresponsible business practices allowed $19.4 billion in transactions with links to Iran to pass through the U.S. It also provided access to banks in Saudi Arabia and Bangladesh that have had links to terrorist financing.
In addition to criticizing HSBC, the Senate subcommittee also took issue with the Office of the Comptroller of the Currency (OCC), which regulates banks. The OCC cited—but never punished—HSBC in 2010 for failing to monitor $60 trillion in wire transfer and account activity, among other mistakes, complained Levin.
During a subcommittee hearing into HSBC, the bank’s head of compliance, David Bagley, resigned from his post after the numerous AML failures under his watch were revealed.
HSBC Exposed U.S. Financial System to Money Laundering, Drug, Terrorist Financing Risks (Homeland Security & Governmental Affairs Permanent Subcommittee on Investigations)
HSBC's David Bagley Resigns after Bank “Allowed Mexican Drug Cartels to Launder Money” (Huffington Post)
Regulators and HSBC Faulted in Report on Money Laundering (by Nathaniel Popper, New York Times)
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