HSBC settles with U.S. government in money laundering case


The international bank HSBC, which is based in the UK has agreed to pay a fine of $1,9 billion as part of an agreement with the U.S. government, after a new investigation on banking practices revealed that HSBC permitted criminals worldwide to launder drug money to finance terrorist operations.

In a report released in July, the U.S. Senate accused the leadership of HSBC of not taking action even though they had prima facie evidence that Mexican drug traffickers used their accounts to transfer funds to the U.S. and Saudi banks with tight relations to terrorist groups as well as Iranians seeking to circumvent the sanctions imposed on them by Washington.

The government began its own investigation through the Department of Justice and determined that there was enough evidence to accuse HSBC of aiding the laundering of billions of dollars.

The Wall Street Journal was one of the main stream media outlets to first report this last case of money laundering charges against HSBC, and they were also the first to report on the agreement between the Justice Department and HSBC to settle the case. Both federal and state authorities in the U.S. have decided not to file criminal charges against HSBC even though this is not the first time the bank is accused of facilitating the laundering of money from drug cartels and a very short list of important customers.

Amazingly, the U.S.’s excuse not to pursue criminal charges was “not to destabilize one of the largest financial institutions in the world,” with revenues of 105,000 million annually and more than 267,000 employees worldwide. The fine of $1,9 billion is one of the largest in recent U.S. history.

Of the total amount of the fine, $1,3 billion accounts for an agreement with the U.S. Executive, to avoid criminal charges. Another $650 million will go to pay a civil penalty. Needless to say this is chunk change for a corporations that has figured out how to get away with murder every single time it has been formally investigated. In July, the bank admitted that the mechanisms of control and transparency in the actions of their clients had been insufficient, and put $1,5 billion dollars in a fund for potential claims. That fund has  been cut down to $400 million.

It is expected that the U.S. Justice Department makes a formal announcement Tuesday. The deal comes less than a month after the British oil company BP agreed to plead guilty on negligence charges in the case of the largest oil spill in U.S. history, which occurred in 2010 in the Gulf of Mexico. BP will pay the U.S. government $ 3,5 billion for environmental offenses.

The Senate report on HSBC focused particularly on transactions between Mexican and U.S. subsidiaries of the bank. In Mexico, the report accused HSBC of “opening accounts for high risk customers including exchange houses and other businesses that offer services and American money, such as the Casa de Cambio Puebla and Sigue Corporation. These two Casas have been investigated for laundering money from the sale of illegal drugs in the U.S. “.

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