Cartoon from The Buffalo News
My research as follows regarding when and where the crisis occurred:
In pursuant of HSBC’s polluted corporate culture, the U.S. financial system has fallen victim to the money laundering of $881 million involving drug trafficking and terrorist financing. With the concealment of origin of nearly a billion dollars, London’s largest bank played as financier for shady illicit funds for drug cartels in Mexico and Columbia among other dangerous places including Iran, Saudi Arabia and Syria linked to terrorism.
U.S. vulnerabilities to HSBC’s money laundering came to light when the bank provided U.S. dollars, services utilizing the U.S. dollar and overall access to the U.S. economic system through its U.S. branch exploiting our financial system to a variety of liabilities and high risk scenarios through its affiliation to dangerous clients and correspondent banks. Their ability to perform in such high risk situations is in part the lack of anti-laundering money (AML) supervision and enforcement of laws and in most part their lack of moral conscious and global awareness.
The U.S. Senate Permanent Subcommittee’s 1 year investigation surfaced the intricacies and depth of the banks relations and ties to laundering dirty money. Among the money laundered, HSBC violated U.S. a variety of American international sanction laws by providing services and funds to banks in Saudi Arabia and Bangladesh who were helping finance terrorist group Al-Qaeda among other terrorist groups according to an Al-Jazeera report. The Senate Subcommittee’s investigation researching and analyzed 1.4 million documents as well as interviews with 75 HSBC bankers and officials.
HBUS (HSBC’S US Affiliate) was subject to this laundering due to the improper and inefficient monitoring of $15 billion in bulk transactions from mid-2006 to mid-2009. Such lax controls can be attributed to incompetent hiring and staffing as well as high employee turnover according to the Senate report. HBUS, is responsible for accounts for 1,200 other banks, HSBC being 80 of them. And during the next two years in 2007 and 2008, HSBC’s Mexican affiliates moved $7 billion into HBUS operations. In the detailed report, Mexican and U.S. authorities informed HSBC that the accumulation of such dexterity of money could have only occurred if it had been in collaboration with illegal narcotics industry.
You’re probably wondering who is responsible for regulating these AML controls? And the absurdity to fail to oversee and investigate $60 trillion in wire transfer and account activity and “a backlog of 17,000 unreviewed account alerts believed to be potentially suspicious active.” The Office of the Comptroller of Currency (OCC) failed to due their proper due diligence prior to opening up accounts for HSBC operations. Essentially, over the past six years, the OCC avoided to take a single action against HSBC, large or small, regardless of the enormity of anti-money laundering deficiencies and severity of laundering implications. Their irresponsibility explains the prolonging and reoccurrence of such atrocious behavior by a corrupt and unprofessional financial institution, HSBC. This information has certainly burned their reputation as the ‘World’s Local Bank.’
In 2010, HSBC was cited by its federal regulator, the Office of the Comptroller of the Currency (OCC), for multiple severe AML deficiencies, including a failure to monitor $60 trillion in wire transfer and account activity; a backlog of 17,000 unreviewed account alerts regarding potentially suspicious activity; and a failure to conduct AML due diligence before opening accounts for HSBC affiliates. Subcommittee investigators found that the OCC had failed to take a single enforcement action against the bank, formal or informal, over the previous six years, despite ample evidence of AML problems.
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