Montzuma's revenge on HSBC? Laundered drugs money haunts bank
UK-based HSBC agreed yesterday to cough up $1.9 billion after admitting massive failures in its anti-money laundering processes that allowed nearly $900m of Mexican drugs money to be rinsed through its accounts. The bank was also slapped for sanctions busting, as it gave the green light to several deals with barred countries such as Libya, Burma, Sudan and Cuba.
But despite the flagrant breaches of US law and the eye-watering fine, executives at Europe’s biggest bank appear to be off the hook in terms of a possible criminal trial. According to the New York Law Journal, the bank has cut a five-year deferred prosecution agreement with the US Justice Department and a similar two-year deal with the Manhattan District Attorney’s office
Eastern District US Attorney Loretta Lynch defended the decision not to prosecute while speaking to reporters yesterday. According to the Journal, she maintained that a strong factor in the decision was HSBC’s decision to co-operate ‘immediately and extensively’ with the authorities.
She was joined by Lanny Breuer, assistant attorney general for the Justice Department’s criminal division, who, according to the Journal, told reporters that the ‘goal is not to bring HSBC down’. He went on to say that the federal authorities wanted to avoid job losses at the bank and ‘systemic’ harm to the economy.
Nonetheless, Mr Breuer appeared to leave the door ajar over the question of whether individual bank executives might still face criminal charges. As to the possibility, he commented elliptically: ‘There may be, but there may not be.’