HSBC, one of the Western world’s largest apologists for, and promoters of, financial jihad, will soon pay a fine of $1 billion for failing to comply properly with anti-money laundering regulations. We should all be concerned that such a huge player in Shariah Finance, one which used to retain the Jihadist Mufti Taqi Usmani as chair of its Shariah Advisory Board (in a move of brash cynicism, HSBC replaced the elder Usmani with his son), has been found to be lackadaisical when it comes to money laundering regulations.
HSBC would have us believe that there is nothing to be concerned about with regard to Shariah Compliant Finance, but how can we possibly trust HSBC’s judgment given their terrible track record in hiring on a hateful Jihadist and failing miserably on money laundering?
The article below comes courtesy of MoneyLaundering.com:
HSBC’s AML Penalty Likely to Approach $1 Billion: Sources
By Brian Monroe
HSBC Holdings Plc could pay as much as $1 billion for Bank Secrecy Act and U.S. sanctions violations, an amount that would overshadow previous fines for similar infractions, say sources.
The potential penalty against the bank, for undisclosed anti-money laundering (AML) and sanctions compliance issues, would be twice as high as the $500 million fine U.S. Justice Department officials considered in August, according to interviews with multiple individuals with knowledge of the negotiations.
The $1 billion figure is “in the realm of what is being discussed” currently, though may be lowered depending on how government officials and regulators ultimately weigh the bank’s cooperation and remediation expenses, said an individual familiar with the matter.
The growth of the possible fine, part of an expected deferred prosecution agreement, is due both to a deeper probe of the bank’s AML problems and the discovery of instances of HSBC employees allegedly removing interbank messages of data indicating American sanctions violations, said a second individual who has knowledge of recent discussions between the bank and U.S. officials.
The practice, known as “stripping,” has been the focus of the department’s largest sanctions-driven deferred prosecution agreements, including a $536 million fine against Credit Suisse in December 2009.
A final settlement for HSBC could be months to nearly a year away, said the second individual, who asked to remain anonymous. The process has been slowed by the fact that multiple divisions within the Justice Department have played a role in the settlement, making it unclear at times which agency will play the lead role in finalizing the penalty, the person said.
Should the HSBC fine reach $1 billion, it would dwarf the $160 million paid in March 2010 by Wachovia Bank’s parent company, Wells Fargo, for poor AML oversight of accounts maintained for Mexican currency exchange houses allegedly used by narcotics traffickers. The penalty, part of a deferred prosecution agreement, is the largest ever to date for AML compliance troubles.
HSBC spokesman Robert Sherman said the bank had no comment on the status of the probe, but added that “in all cases, we’re cooperating and seeking to resolve these matters.” The Justice Department declined to comment on the case.
The bank’s alleged AML violations involve “HSBC Premiere” accounts and correspondent relationships in Mexico and other high-risk countries in Latin America, several individuals with knowledge of the investigation toldMoneylaundering.com/ComplianceAdvantage last year. The bank’s compliance efforts have also suffered from understaffing and poor transaction monitoring, they said.
Regulatory problems began for the bank when federal prosecutors prosecuted a seemingly unrelated case against Barton Adams, a doctor who ran a pain management office in Vienna, WV. The Justice Department accused Adams in November 2008 of using his HSBC account in a Medicare fraud scheme.
The investigation prompted U.S. officials to take a broader look at HSBC’s compliance program, and eventually led to a joint investigation by the U.S. Justice and Treasury Departments, the Federal Reserve Bank of Chicago and the U.S. Attorney’s Office, a source toldMoneylaundering.com/ComplianceAdvantage in August.
HSBC acknowledged in an August regulatory filing that it would “likely” be the subject of a formal enforcement action and could pay a monetary penalty for problems with its banknote business and its correspondent accounts.
The London-based financial institution has since contracted several high-profile consultancies, including Deloitte, and is currently hiring consultants to help conduct a “look back” as part of its remediation efforts, said a third individual, who is familiar with remediation efforts.
“It’s a big mess and sanctions violations are part of the problem,” said the person.
Despite those efforts, the bank has yet to show department officials that it has sufficiently improved its compliance program, according to a fourth source, who has spoken to individuals tied to the case.
“HSBC can hire whoever they want, but they are still struggling with a lack of compliance,” said the person.
In October, the U.S. Treasury Department’s Office of the Comptroller of the Currency and the Federal Reserve issued separate AML-related enforcement actions against HSBC, citing poor suspicious activity monitoring, independent testing and customer due diligence.
The bank had compliance deficiencies in its Payments and Cash Management, Global Banknotes and foreign correspondent operations divisions, according to the orders. At times, the problems involved accounts held for foreign political persons, the regulators said.
In 2003, HSBC entered into a written agreement with the Federal Reserve Bank of New York and New York State Banking Department to improve its AML compliance, including suspicious activity reporting and transaction monitoring.