Published On: Tue, Dec 11th, 2012

HSBC avoids charges of money laundering to Mexcian drug cartels, financing terrorists with $1.9 billion payoff

HSBC. the banking giant, will pay $1.92 billion in a settlement with U.S. regulators to resolve money-laundering allegations, the bank announced Tuesday.

Photo/RevisorWeb 2004 wikimedia commons

This deal will defer any prosecution from the Department of Justice. The agreement prevent charges from being brought against the bank, pending financial penalties and some additional provisions.

“We accept responsibility for our past mistakes,” HSBC CEO Stuart Gulliver said in a statement. “We have said we are profoundly sorry for them, and we do so again.”

The settlement follows a Senate subcommittee report released in July that accused HSBC of failing to prevent money transfers by Mexican drug cartels and banks linked to terrorism financing.

“Over the last two years, under new senior leadership, we have been taking concrete steps to put right what went wrong and to participate actively with government authorities in bringing to light and addressing these matters.”

The deferred prosecution agreement, when detailed by U.S. Justice Department officials later on Tuesday, could yield new information about a failure at HSBC to police transactions linked to Mexico, sources familiar with the matter said to Reuters.

Behind the scenes, authorities debated for months the advantages and perils of a criminal indictment against HSBC.

Some prosecutors at the Justice Department’s criminal division and the Manhattan district attorney’s office wanted the bank to plead guilty to violations of the federal Bank Secrecy Act. (source)

The law forces financial institutions to report any cash transaction of $10,000 or more and requires banks to bring any dubious activity to the attention of regulators.

“The Justice Department asked Treasury for our view about the potential implications of prosecuting a large financial institution,” David S. Cohen, the Treasury’s under secretary for terrorism and financial intelligence, said in a statement. “We did not believe we were in a position to offer any meaningful assessment. The decision of how the Justice Department exercises its prosecutorial discretion is solely theirs and Treasury had no role.”

Still, some prosecutors proposed that Attorney General Eric Holder meet with Treasury Secretary Timothy Geithner, people briefed on the matter said. The meeting never took place.


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About the Author

- Writer and Co-Founder of The Global Dispatch, Brandon has been covering news, offering commentary for years, beginning professionally in 2003 on Crazed Fanboy before expanding into other blogs and sites. Appearing on several radio shows, Brandon has hosted Dispatch Radio, written his first novel (The Rise of the Templar) and completed the three years Global University program in Ministerial Studies to be a pastor. To Contact Brandon email [email protected] ATTN: BRANDON


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