US senate probe blames HSBC for money launderingJuly 17th, 2012 - 11:21 am ICT by IANS
Washington, July 17 (IANS) US Senate investigators have accused global banking giant HSBC of failing to prevent billions of dollars worth of money transfers linked to drug cartels and terrorist groups.
HSBC failed to review thousands of suspicious transactions and properly vet clients over the past decade, Senate’s Permanent Subcommittee on Investigations said in a report released Monday.
Among other issues, the report notes that in 2007 and 2008, HSBC’s Mexico unit shipped $7 billion in cash to the bank’s US affiliate, a volume of shipments that law enforcement officials said could reach that size “only if they included illegal drug proceeds.”
HSBC Mexico had a number of high-profile clients linked to drug trafficking, the report said, as well as “a huge backlog of accounts marked for closure due to suspicious activity, but whose closures were delayed.”
The subcommittee also found that HSBC worked extensively with Saudi Arabia’s Al Rajhi Bank, some owners of which have been linked to terrorism financing, according to CNN.
Some evidence suggests Al Rajhi’s “key founder” was “an early financial benefactor of al Qaeda,” the report said.
HSBC’s US affiliate supplied Al Rajhi with nearly $1 billion worth of US banknotes up to 2010, and also worked with two banks in Bangladesh that some evidence links to terrorism financing as well.
“From an oversight perspective, the failure of accountability here is dramatic,” Senator Carl Levin, chairman of the subcommittee, said Monday.
The report also said HSBC’s US affiliate handled nearly 25,000 transactions involving Iran between 2001 and 2007, despite US sanctions against the country.
Other HSBC affiliates making transfers to the US frequently stripped information from the transactions that linked them to Iran in order to evade scrutiny.
Some HSBC executives in the US were aware of this practice as far back as 2001, the report said.
(Arun Kumar can be contacted at firstname.lastname@example.org)
- U.S. government seeks names of U.S. residents with HSBC India bank accounts to avoid taxes - Apr 08, 2011
- Future ATMs may play ads before you get your money - Mar 14, 2012
- US wants HSBC to reveal American tax dodgers in India - Apr 08, 2011
- Indian American doctor charged with hiding India accounts - Sep 29, 2011
- Indian-American pleads guilty to hiding Indian bank accounts - Apr 12, 2011
- Unions protest HSBC's plan to axe 3,000 jobs in Hong Kong - Sep 08, 2011
- US targets banks that help Iran - Aug 01, 2012
- Mexico lost $872 bn to illegal capital flight: Study - Jan 31, 2012
- 4.2 billion dollar worth 'blizzard of banknotes' have flown out of Kabul since 2007 - Jul 06, 2010
- Obama orders freeze on Iranian property - Feb 07, 2012
- Mexican remittances go up - Aug 02, 2012
- Indian American indicted for concealing bank accounts in India - Jan 27, 2011
- Mexican remittances rise - Jul 03, 2012
- US to freeze $700 mn aid to Pakistan - Dec 13, 2011
- Enough global oil to sideline Iran: Obama - Mar 31, 2012
Tags: al rajhi bank, arun kumar, carl levin, cnn, drug cartels, drug proceeds, drug trafficking, financial benefactor, global banking, illegal drug, law enforcement officials, mexico unit, permanent subcommittee on investigations, profile clients, senate investigators, senate probe, senator carl levin, suspicious transactions, terrorism financing, us senate