Sat Feb 16, 2013, 07:39 AM
xchrom (108,903 posts)
5 Outrageous Revelations from Matt Taibbi's Takedown on HSBC's Drug Money Launderin
1. By HSBC’s December settlement, the bank had already received two cease-and-desist letters.
First, in 2003, the Federal Reserve sent a cease-and-desist letter to HSBC demanding the bank take strict precaution not to do business with criminals and terrorists. The letter came after revelations that HSBC had opened accounts for shady characters like Sulaiman bin Abdul Aziz Al Rajhi, one of the “20 early financiers of Al Qaeda.”
2. HSBC covered its tracks when helping oppressive regimes avoid sanctions
Taibbi reports that HSBC used a technique called “stripping” to avoid detection when they did business with countries under U.S. sanction. In particular, HSBC sought to increase its profits by laundering cash for Iran. The author quotes a memo from HSBC’s Middle East subsidiary, HBME:
"It is anticipated that Iran will become a source of increasing income for the group going forward," the memo says, "and if we are to achieve this goal we must adopt a positive stance when encountering difficulties."
3. HSBC ran offshore branches designed specifically for money laundering
In what Taibbi calls the “pinnacle innovation in the history of sleazy banking practices,” HSBC created a so-called “Cayman islands” branch in Mexico that let customers sidestep routine screening when opening accounts. The writer says clients “barely had to submit a real name and address, much less explain the legitimate origins of their deposits.” A 2002 audit revealed that 41 percent of accounts didn’t have complete client information.
4. HSBC did direct business with “the worst trafficking organizations imaginable.”
A part of a major narcotics investigation, federal agents discovered a ton of evidence that implicated HSBC in widespread money laundering. For example, Taibbi reports the bank “played a key role in the so-called Black Market Peso Exchange, which allowed drug cartels in both Mexico and Colombia to convert U.S. dollars from drug sales into pesos to be used back home.” And the dealers HSBC did business with were some of the most violent in the world.
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5 Outrageous Revelations from Matt Taibbi's Takedown on HSBC's Drug Money Launderin (Original post)
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