HSBC Investigated for Money Laundering

HSBC Investigated for Money Laundering

Based on the New York Times report on Saturday, US prosecutors are looking into whether British bank HSBC was involved in laundering money for Mexican drug cartels and moving cash for Saudi Arabian banks with ties to terrorists.

Furthermore, the investigators were also probing whether HSBC circumvented US law by transferring money through its American subsidiary for sanctioned nations, including Iran, Sudan and North Korea.

Last month, HSBC announced that its Mexico unit had paid a fine totalling 379 million Mexican pesos ($27.5 million) to Mexico's banking regulators for breaching anti-money laundering controls.

HSBC earlier apologized and a senior executive resigned after US lawmakers accused Europe's biggest bank of giving Iran, terrorists and drug dealers access to America's financial system.

In a 330-page report, the US Senate found the lender allowed affiliates in countries such as Mexico, Saudi Arabia and Bangladesh to move billions of dollars in suspect funds into the United States without adequate controls.

The report said HSBC's Mexican affiliate "transported $7.0 billion in physical US dollars to HBUS from 2007 to 2008... raising red flags that the volume of dollars included proceeds from illegal drug sales in the United States."

According to The Times, HSBC reached out to federal prosecutors in July in hopes of securing a settlement by September as they are eager to resolve the investigation.  But officials said a settlement in the next couple of weeks was highly unlikely.

Posted by James Fried on Tuesday August 28 2012, 1:40 AM EST. Ref: Reuters. All trademarks acknowledged. Filed under Featured News, Finance. Comments and Trackbacks closed. Follow responses: RSS 2.0