RICO Money Laundering

Because LIBOR Investor Fraud is so yesterday.

HSBC Reveals Problems With Internal Controls

By LANDON THOMAS JR. and MARK SCOTT, The New York Tmes

July 12, 2012

The money laundering, which a U.S. Senate subcommittee indicates was linked to terrorism and drug deals, could result in HSBC’s paying fines of up to $1 billion, according to analysts.

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In the case of the money laundering, the U.S. authorities have been examining HSBC for several years. On Tuesday, officials from the bank are set to testify in Washington before the Senate Permanent Subcommittee on Investigations. A subcommittee spokesman declined on Thursday to discuss the investigation, but the panel’s Web site describes the agenda: “a hearing on the money laundering and terrorist financing vulnerabilities created when a global bank uses its U.S. affiliate to provide U.S. dollars, U.S. dollar services, and access to the U.S. financial system to high risk affiliates, high risk correspondent banks, and high risk clients, using HSBC as a case study.”

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Adding another political wrinkle: HSBC’s former chairman, Stephen Green, who was in office from 2006 to 2010 when many of the money-laundering detection problems occurred, is currently the trade minister in British prime minister David Cameron’s government. Mr. Green’s office did not reply to a request for comment on Thursday.

HSBC braced for huge U.S. penalty

By Sharlene Goff, Financial Times

July 12, 2012

HSBC is to apologise to US lawmakers for failing to have appropriate controls in place to ensure it did not facilitate the financing of terrorism and other criminal activities, transgressions that analysts estimate may cost it up to $1bn in fines.

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Mr Gulliver warned that HSBC was likely to face further action from other US authorities in coming months.

HSBC said in its 2011 annual report that fines relating to money laundering issues could be “significant”. There has been speculation among analysts that the bank could be hit with a higher charge than the $619m ING, the Dutch bank, agreed to pay to settle accusations it violated US sanctions by helping Iranian and Cuban companies move billions of dollars through the US financial system. Some have suggested it could be as much as $1bn.

HSBC chief admits bank failed to control money laundering

Dominic Rushe, The Guardian

Wednesday 11 July 2012

In the memo, first reported by Bloomberg News, Gulliver said the hearing would “reveal that in the past we fell well short of the standards that our regulators, customers and investors expect”. He said: “It is right that we be held accountable and that we take responsibility for fixing what went wrong.”

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Last month ING, the Dutch bank, paid $619m to settle accusations it helped Iranian and Cuban companies move billions of dollars through the US financial system in violation of US sanctions. Some analysts have suggested HSBC’s fine could be far higher.

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William Black, professor of economics and law at University of Missouri Kansas City, said: “There is a theme developing in Washington that the City of London is evil, that it has a corrupt culture.”

He said that while the view might not be fair, the JP Morgan scandal, Libor and now HSBC meant it was a theme that was likely to be developed. “We like to blame someone else,” he said.