+++ 20. Juli 2012 +++
HSBC, Laundering Money for Drug Cartels and Terrorist Financiers
A stunning example of bank criminality and of government cover-up was presented in the United States during a July 17 hearing of the Senate Permanent Subcommittee on Investigations as well as in the explosive 335-page report it released on the same day. The hearing on "U.S. Vulnerabilities to Money Laundering, Drugs and Terrorist Financing” featured the case history of HSBC (formerly the British Empire's Hongkong and Shanghai Banking Corporation).
Top officials of the bank were grilled for hours by the Subcommittee's co-chairmen, Democratic Senator Carl Levin and Republican Tom Coburn, on evidence that HSBC had knowingly subverted U.S. laws to launder billions of drug cartel and terrorist monies through the U.S. banking system, over the past decade. According to the testimony of a former HSBC officer, the bank controls 60% of the money laundering for the drug trade inside the U.S. coming from Mexico, which is the entry point for 80% of the total narcotics flooding the country.
From mid-2006 until mid-2009, the U.S. affiliate of the bank (HBUS) cooperated with the Mexican affiliate (HBMX) in the transfer of $15 billion in bulk cash – which means transporting physical dollar bills across the border. At its peak, HBMX, which operated freely with HBUS, operated 50,000 accounts holding up to $2.1 billion in its Cayman Islands branch, a branch which, as Sen. Levin pointed out, was a non-existent shell company, with no office or employees in the Caymans at all, as everything was done from the Mexican branch.
Another explosive aspect of the Subcommittee report is the section on the Al Rajhi Bank and terrorist financing. It documents that for more than 25 years, HSBC provided banking services to Al Rajhi Bank - even after evidence emerged that the bank, including one of its founders who was an early financial benefactor of al Qaeda, was funding terrorist operations!
In 2003 a report by the CIA entitled "Al Rajhi Bank: Conduit for Extremist Finance," found that "senior al-Rajhi family members have long supported Islamic extremists and probably know that terrorists use their bank." Al Rajhi Bank gained notoriety for providing banking services to several of the hijackers in the 9-11 terrorist attacks.
Finally, in January 2005, the U.S. affiliate of the HSBC decided to end its relationship with Al Rajhi Bank. But in December 2006, the relationship was reactivated and continued for another four years!
As Senator Levin said in his opening statement at the hearing: "it is of great concern to the subcommittee, and it should be of great concern to every American, that the OCC tolerated the mounting anti-money-laundering problems at HBUS for five years without taking any formal or informal enforcement action."
Yet, the harshest penalty the Treasury Department is now "negotiating" with HSBC, is for it to pay a civil monetary fine worth a mere iota of what the bank made off its illegal activities. That is the real policy of the Obama Administration.
For background, see: HSBC Under Investigation for Drug Money Laundering and the news item below.
~ deutsch + english ~
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