Bank Evades Criminal Charges for Drug Cartel Money Laundering

HSBC bank has been allowed to pay a $1.9 billion fine in order avoid any criminal sanctions following the revelation it helped Mexican drug cartels and al-Qaeda-linked groups launder hundreds of millions of dollars in drug money. securityfence.jpg

Our Miami foreclosure lawyers understand that while the U.S. Justice Department will haul off medical marijuana providers in California to prison for decades, it refuses to prosecute those who are facilitating real and extensive harm.

HSBC leaders were quoted as saying they were “profoundly sorry,” adding that it is not the same organization today as it was when those illegal transfers occurred.

Under the terms of the settlement, the bank has admitted that it broke several laws, including the Trading with the Enemy Act and the Bank Secrecy Act.

Sure, $1.9 billion sounds like a lot. Consider though that HSBC’s most recent quarterly income statement shows it raked in more than $6.3 billion in gross profits in the last three months of 2012. It made more than $25 billion in all of 2012. So that $1.9 billion is roughly 7.5 percent of the company’s profits for last year.

Let’s turn this around and say you earn an annual salary of $40,000 and are arrested for a federal drug trafficking charge. If the federal government treated you the same way it treated HSBC, you’d be allowed to pay $3,000, say you’re very sorry and that you’ve changed and walk away free and clear.

That would never happen. In fact, one of those middlemen convicted of participating in the money-laundering scheme has been found guilty of numerous federal charges and is awaiting a possible 15 to 18-year prison sentence.

We need to be asking why our federal leaders have no problem holding these large institutions to a lesser standard – especially given the large amount of taxpayer resources that went into the intensive five-year investigation of this scheme.

The bank can’t claim ignorance. These were bulk-cash transactions funneled back-and-forth between the U.S. and Mexico. There were huge red flags at every step along the way. As U.S. Assistant Attorney General Lanny Breuer said, the long history of dysfunction at the bank in this regard was “astonishing.”

And it’s not that the bank was too large to fail or that the government had no power to enact further penalties. A criminal conviction for money laundering and the other crimes of which the bank was accused could have resulted in the institution being blocked from access to the U.S. banking system – a financial death sentence.

Instead, prosecutors decided to defer prosecution in favor of the monetary settlement.

Perhaps most disturbingly, HSBC isn’t the only bank to have been caught doing this. Back in December, British banking firm Standard Chartered was ordered to pay about $330 million to the U.S. government after it was found to have aided Iran and other countries from avoiding sanctions in the U.S.

When banks are not held fully accountable for their gross negligence in blatantly breaking the law and aiding violent criminals, what kind of message does that send to law-abiding homeowners who are simply struggling to fight back against an impending foreclosure against these same firms?

If you’re battling foreclosure in Miami or the surrounding areas contact Jacobs Keeley for a confidential appointment to discuss your rights. Call (305) 358-7991. Also, don’t miss Miami Foreclosure Attorney Bruce Jacobs on 880AM/the Biz, every Wednesday from 5 p.m. to 6 p.m. on “Mortgage Wars,” discussing foreclosure topics that matter to YOU.

Additional Resources:
‘Profoundly Sorry’ HSBC Reaches $1.9B Settlement In Money-Laundering Case, Dec. 10, 2012, By Steve Mullis, NPR
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Multi-Billion Dollar Settlements Vague, Replace Foreclosure Reviews, Jan. 19, 2013, Miami Foreclosure Lawyer Blog