In 2005, Bloomberg Markets magazine accused HSBC of money-laundering for drug dealers and state sponsors of terrorism. Then-CEO Stephen Green said that “This was a singular and wholly irresponsible attack on the bank’s international compliance procedures”, but subsequent investigation indicated that it was accurate and proved that the bank was involved in money laundering for the Sinaloa Cartel and throughout Mexico. U.S. Assistant Attorney General Lanny Breuer characterised HSBC compliance during this period as “stunning failures of oversight – and worse .
In 2008, the CEO of HSBC Mexico was told that Mexican law enforcement had a recording of a Mexican drug lord saying that HSBC Mexico was the place to launder money.” The DOJ, decided not to pursue criminal penalties, a decision which the New York Times labeled a “dark day for the rule of law.”
On 11 December 2012, HSBC agreed to pay a record $1.92 billion fine in this money laundering case. “Bank officials repeatedly ignored internal warnings that HSBC’s monitoring systems were inadequate, the Justice Department said.
Feb. 11, 2016,The banking giant HSBC “knowingly” provided support to four of Mexico’s most notorious drug cartels by laundering their money and providing material support to terrorists, according to a new lawsuit filed by four families.
The papers we’re filed in U.S. District Court, Brownsville, TX. The suit alleges the bank is liable for the damage inflicted by the cartels under the Anti-Terrorism Act.
Two Americans are represented among the claimants,Jaime Zapata and Victor Avila, agents for U.S. Immigration and Customs Enforcement (ICE) who were attacked in Mexico in 2011. Zapata was killed, and Avila wounded.
According to the lawsuit, employees at Mexican HSBC bank branches “routinely accepted” deposits of hundreds of thousands – sometimes millions – of U.S. dollars from people with no identifiable source of income. The suit accuses employees of fabricating documents, accepting bribes, and keeping illegal accounts open despite having been ordered to close them.
The complaint says HSBC planned and executed systems that appeared to be anti-money laundering programs, but were in fact designed to guarantee that laundered money would go through the bank undetectable.
The lawsuit stated,”Money laundering is the lifeblood of the Mexican drug cartels, enabling them to construct a façade of legitimacy through which they establish, continue and grow their global enterprises,”
“Without the ability to place, layer, and integrate their illicit proceeds into the global financial network, the cartels’ ability to corrupt law enforcement and public officials and acquire personnel, weapons, ammunition, vehicles, planes, communication devices, raw materials for drug production and all other instrumentalities essential to their operations would be substantially impeded.”
There aren’t any Mexican drug cartels placed on the U.S. list of Foreign Terrorist Organizations, but they should be.
HSBC did not respond to a request by the Associated Press for comment yet.