HSBC Bank Admits Cartel Money Laundering

The London-based HSBC Group, Europe's largest banking entity, has agreed to forfeit $1.256 billion and pay an additional $600 million-plus in fines for laundering money for Mexican drug cartels and other objects of American ire, federal officials announced Tuesday. The agreement was part of a deal to avoid criminal prosecution of the bank by the Justice Department and will result in deferred prosecution provided the bank lives up to its agreements with the Justice Department.

The bank was accused of violating the Banking Secrecy Act, the International Emergency Economic Powers Act, and the Trading with the Enemy Act -- the latter two types of violations having to do with its transactions on behalf of customers in Cuba, Iran, Libya, Sudan, and Burma, all of which were subject to sanctions enforced by the Office of Foreign Assets Control at the time of the violations. The Banking Secrecy Act violations have to do with the banks laundering of at least $881 million for Mexican drug trafficking organizations.

"HSBC is being held accountable for stunning failures of oversight -- and worse -- that led the bank to permit narcotics traffickers and others to launder hundreds of millions of dollars through HSBC subsidiaries, and to facilitate hundreds of millions more in transactions with sanctioned countries," said Assistant Attorney General for Criminal Affairs Lanny Breuer. "The record of dysfunction that prevailed at HSBC for many years was astonishing. Today, HSBC is paying a heavy price for its conduct, and, under the terms of today's agreement, if the bank fails to comply with the agreement in any way, we reserve the right to fully prosecute it."

"Today we announce the filing of criminal charges against HSBC, one of the largest financial institutions in the world," said US Attorney for Eastern New York Loretta Lynch. "HSBC’s blatant failure to implement proper anti-money laundering controls facilitated the laundering of at least $881 million in drug proceeds through the US financial system. HSBC's willful flouting of US sanctions laws and regulations resulted in the processing of hundreds of millions of dollars in OFAC-prohibited transactions. Today's historic agreement, which imposes the largest penalty in any BSA prosecution to date, makes it clear that all corporate citizens, no matter how large, must be held accountable for their actions."

HSBC may have been slapped with the largest penalties ever, but it is hardly the only bank to have been caught profiting off prohibition. In 2010, Wachovia forfeited $110 million to avoid criminal prosecution for money laundering for the cartels, Sigue Corporation forfeited $15 million in 2008, American Express International Bank paid $65 million in fines and Union Bank of California forfeited $21.6 million in 2007, and Bank Atlantic paid a $10 million fine to avoid prosecution for laundering drug cartel profits in 2006. Like HSBC, all of those banks agreed to reform their banking practices and submit to federal oversight as part of the agreement.

HSBC is accused of under-staffing its anti-money laundering program and failing to monitor billions of dollars in purchases of physical dollars by its Mexican affiliate, HSBC Mexico. It reportedly failed to monitor over $670 billion in wire transfers and the purchase of over $9.4 billion in US dollars.

According to the Justice Department, "HSBC Mexico's own lax AML controls caused it to be the preferred financial institution for drug cartels and money launderers."

The unanswered question is why a government that lets bankers who launder hundreds of millions of dollars of drug profits routinely sends crack-slingers to federal prison for decades for selling a few dollars worth of drugs. Perhaps if those drug dealers had a few million dollars they could hand over to the feds, they could walk, too.

New York, NY
United States
Permission to Reprint: This article is licensed under a modified Creative Commons Attribution license.
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I TRADE WITH THE ENEMY EVERY SINGLE F'N DAY! Matter of fact, they're NOT the ENEMY, YOU - PROHIBITION - YOU ARE THE ENEMY YOU BASTARD! No, prohibition pushers are the enemy so nevermind, ive never traded with the enemy however a quick thought to girlfriends of christmas past and i quickly realize that, on second thought, perhaps I have not traded with the enemy but I have slept with several enemies >_>


i digress. This is an outrage!! An outrage! At this point, Ive recourse for nothing else but to soften my anger and lessen my pain with the products OF THE ENEMY. I cant wait for a few hours to tell the enemy that they are the enemy, incase they didn't know, and then quickly thank them for giving me free food and a warm place to sleep countless times when prohibition has kicked my tooshy wooshy and i was broke homeless and sick. Oh and the govt shelters and hospitals wouldn't have me and wouldn't help me. I had no choice i mean, the GOOD GUYS wouldn't help so the BAD GUYS, the ENEMY, was all that was left.




but ill tell you one thing, I am DEFINITELY moving absolutely all my money OUT of CHASE and INTO HSBC TODAY. Closing all accounts any and everywhere else - HSBC is a bank FOR ME that I CAN AGREE WITH POLITICALLY AND PERSONALLY. I APPLAUD YOU HSBC! But your British, land of heroin maintenance - so NATURALLY I KNEW YOU'D BE TEN STEPS AHEAD OF EVERYBODY.


I encourage all reformers to make HSBC the OFFICIAL BANK OF REFORM.


WHY, if the ENEMY thinks good enough of HSBC to work with them, and the ENEMY is in truth OUR FRIENDS, our allies, our business associates - INDEED in some cases our very own parents, children, brother, sister, nephew, niece, red headed step child - are the ENEMY, well if its good enough for them it's damn sure good enough for me. 


No wonder everytime i get out of the ENEMY's SUV there are HSBC ATM receipts all over the damn place. Matter of fact my first instinct wasn't even to write this it was to call HSBC immediately to find out about what kind of savings/checking they do and as of right now Tamara is on the line with me and she told me something that makes absolutely terrific sense, she said HSBC stands for nothing but sometimes in Asia they make it stand for HAPPY SAVINGS BANK COMPANY


well SHIVER ME TIMBERS - thats a BLOODY GREAT NAME - ALL THINGS CONSIDERED. I'd ask Tamara to marry me but i doubt we could see eye to eye on certain things, nevertheless, thanks tamara, thanks HSBC and thanks to the ENEMY, you rascally rascals!!!!! Cant wait to give the enemy all the money to my name in a few hours, just like every other single day. IT FEELS GOOD knowing THE ENEMY is gonna put that money of mine into an HSBC account at the end of the day.


SOMETIMES things JUST WORK OUT for us lot, eh friends?

borden's picture

CJ,The Trading With The Enemy


The Trading With The Enemy charges had to do with the bank's transactions with some countries like Cuba and North Korea that our government is at odds with, not with the drug trafficking.

- Dave

Message from CJ; re 'enemies' and all that

CJ Calm down


Most of us here know who/WHAT the real enemy is but frankly i still do not feel comfortable as a Brit knowing that a local bank to me has laundered all that drug money hah? Javier Sicilia and friends went into a NY Bank three months ago with "blood" covered dollar Bills  to ask them for replacement bills as he did not want to be walking around with that money "burning" his pocket


I understand where You are coming from AND it is great to have someone as passionate as me around but please read this for what it is: an outreach from fellow reformer in Britland/London


Andria (Millie's-5yrs old - Mama)

Take Home Message

So if I understand this correctly, if you're a bank and take money from drug cartels, and get caught, all you have to do is give the money back. As long as you promise not to do it again, you will not be prosecuted. If you're just a regular person, you go to jail for life. Seems fair.

Drug Money Washing

The Federal government knows that the big banks launder drug money . Drug prohibition assures this . The government sits back and lets the money pile up and then moves in for the shakedown . The government makes it seem like a fine , you got caught and now you pay , but it is really nothing but a kickback to the government by the banks . It happens over and over . Who will be the next bank to pay a " fine " ? Can you see the circle ?

slapped with the highest penalties ever....or on the wrist?

When one compares the fines to the overall profits of the bank they look like a slap on the wrist of the bank and a slap in the face to every taxpayer whose money is used to prop up this bogus drug war. In the case of HSBC the fine imposed is a mere four weeks of the bank's revenue.

As I understand it, the decision not to criminally prosecute the bank was out of concern it would impact an already shakey economic situation. So now we have banks that are too big to fail and too big to prosecute-seems to me like there is ZERO incentive for directors of large financial institutions to follow any rules whatsoever? Look for more cowboy action in the banking world in the near future as more go to prison or the morgue.

HSBC and drugs

How will these allegations and fines effects, people that has been paying them money, I read something about whatchovia also, HSBC bought my mortgage from them? Now my son got 20+ years for dealing drugs for over a 6-7 month time period and they only get a fine because they're a multi -billion dollar company, that's saying if we have money we can get away with breaking the law for years, I feel like our houses should be paid in full for us consumers that not knowingly helped them break the law using us as patsies, and they should fork over their attorney to help small guys who were trying to feed their family and not getting rich, after all they helped bring the dope over here for them to sell

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