US Fines Bank For Its Cartel Cash
Tuesday, December 11, 2012
HSBC was accused of disregarding sanction laws and doing business with people in countries such as Iran, Libya, Cuba, and the Sinaloa drug cartel.
TUCSON, Ariz. A British banking corporation reached a settlement with the U.S. Treasury Department for nearly $2 billion Tuesday morning. HSBC Holdings was accused of failing to enforce money laundering rules against criminal syndicates. Among the various shadow figures the bank is accused of doing business with was Mexico's Sinaloa drug cartel.
HSBC was accused of disregarding sanction laws and doing business with people in countries such as Iran, Libya, and Cuba. The Justice Department says bank branches in the U.S. were also used by the Sinaloa Cartel and the Norte del Valle Cartel in Colombia to launder nearly $1 billion.
Jennifer Shasky Calvery is director of the Treasury Department’s Financial Crimes Enforcement Network. "Pretty much every step of the way, they fell down on their obligations and they had a corporate culture that allowed this kind of thing to happen," she said.
HSBC was charged with violating what’s called the Bank Secrecy Act. Under the law, banks are supposed to monitor themselves to ensure criminal syndicates are not using their systems to launder money.
For example, from 2006 to 2009, bulk cash deposits totaling more than $15 billion were deposited into HSBC banks in Mexico. Hundreds of billions in wire transactions from Mexico were also allowed to go through, no questions asked.
Charles Intriago is a former federal prosecutor and a financial crimes expert in Florida. He says the Justice Department should have levied criminal charges.
"It’s nothing. This penalty is peanuts," Intriago said. "And why they didn’t indict some of the executives who were responsible for some of these illegal transactions is beyond me."
Fines filed as deferred prosecution agreements have been commonplace in bank money laundering cases. In 2010, Wachovia Bank paid out a $160 million fine. It was accused of allowing nearly a half billion dollars to flow unmonitored from Mexico into accounts here.
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