Monster Report On HSBC Money Laundering Reads Like A James Bond Villain's Master Plan


Photo: The U.S. Army / Flickr

Officials from HSBC are on Capitol Hill today, answering the damning findings of a Senate report filled with shocking information about how the bank circumvented regulations to allow America’s enemies to hold dollars (read it here).We’re talking about the bank reportedly holding and moving money for drug cartels, suspicious Russian entities, blacklisted Syrian businessmen and more.

All 335 pages of the Senate report read like the plot of a James Bond movie with characters at HSBC Middle East (HBME), HSBC Europe (HBEU), HSBC U.S. (HBUS), and HSBC Mexico (HBMX).

Protecting the borders of the United States of America goes beyond taking off your shoes at the airport. On the balance sheets of banks across the globe, money can run to whoever wants it enemies included.

Here’s how that happens.

In 2006 a regulator had to stop the HBUS from processing a payment sent from HB Middle East that was going to be credited to a bank that funds Hamas.

From 2001-2007, HSBC in The United Kingdom held 2 U.S. dollar correspondent accounts for the Taliban and one for a bank in Syria

HSBC banks all over Latin America held U.S. dollar accounts for Cuban clients.

Despite clear money laundering risks coming from Mexico, HSBC gave the country its lowest risk rating and did a TON of business with its Mexican affiliates.

In 2008, an HBUS client, Mexican company Sigue admitted to allowing over $500,000 of drug proceeds to flow through 22 states.

After employee protest, HSBC continued supplying US dollar notes for Saudi Arabia's Al Rajhi Bank. Al Rajhi is suspected of financing terrorist operations in the Middle East and Chechnya.

According to Senate testimony, HSBC provided Al Rajhi with up to $1 billion worth of notes.

HBUS cleared $290 million worth of travellers cheques for Japan's Hokoriku bank over 4 years. All were made payable to companies or individuals in the Russian used car business, HBUS had little information on this client.

travellers cheques were clearing at a rate of $500,000- $600,000 per day.

It took HBUS 5 years to completely close 9 North Korean bank accounts from 2005-2010.

When regulations on Iran tightened in 2003, HBME and HBEU tried to continue doing business with now illegal clients by changing documentation, among other things. 5 Iranian banks took advantage of this to the tune of $500,000 to $1 million a day.

From the report: 'A later analysis by an outside auditor at HBUS's request found that HSBC affiliates sent about 7,800 Iranian transactions through US dollar accounts during 2004, of which 90% continue to be undisclosed.'

Even after review, HSBC held Swiss and Cayman Island accounts for a Syrian businessman Rami Makhlouf, he's on on OFAC's specially designated nationals list.

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