Tag Archives: money laundering

Tough-on-crime Jeff Sessions lets Citigroup off with fine for money laundering across the border

Daily Kos:

Because despite a whole lot of tough talk and a seemingly zero-tolerance approach to crime, Sessions and the Trump administration just let Citigroup-owned Banamex USA get away with six years worth of illegal activity with a hefty fine and no jail time for anyone involved.

Banamex and Citi officials knew of some 18,000 separate suspicious account activities from 2007 to 2012 yet reported just six to regulators, according to the description of the crimes in the deal. The transactions mostly involved remittance payments from people in the United States to account holders in Mexico — a standard class of transaction relied upon heavily by immigrants.

The transactions Citigroup failed to police internally or report to external authorities, however, were not typical worker remittances. Those usually involve small sums and scattered movements of money — as one would expect to see when a large group of individual workers are sending some of their pay back home to a large number of families.

But wait. What exactly happened to those long, harsh sentences and mandatory minimums? Guess they only apply to drug dealers. And only if you are black or brown. Since this wasn’t actually some hardworking immigrants sending money to relatives back home but instead some unknown “person or organization” sending large quantities of money back and forth across the border, Ol’ Jeffy thought to himself “Meh, we’ll let this one slide!”

Citigroup’s subsidiary noticed that very large remittances were flowing into the same bank account — as one might expect to see if illicit, scattered profits earned in the United States were being consolidated across the border by the person or organization who had made them possible. […]

Under the non-prosecution agreement, Citigroup-owned Banamex USA will pay $97.4 million and admit it broke the Bank Secrecy Act for years.

Spain probes ex-HSBC executives over money laundering

(AFP) A Spanish court is probing seven former executives of HSBC’s private Swiss bank on suspicion of money laundering following an investigation of documents in the “Swissleaks” scandal on bank-supported tax evasion, legal sources said on Thursday.

In an order dated January but not published until now, the National High Court named seven persons under suspicion of “persistent money laundering and criminal association” who in 2006 and 2007 held senior positions at the Swiss subsidiary of HSBC.

They include former chairman of the board Peter Widmer and former CEOs Christopher Meares and Clive Bannister.

The investigation, which began in May 2016, is based on the “Falciani list”, a cache of files listing unreported accounts of customers of the Swiss subsidiary of HSBC which was stolen in 2008 by former employee Herve Falciani.

Read on.

Bank linked to ‘Panapa Papers’ hit with $180M laundering fine

New York’s top financial regulator slapped a “Panama Papers”-linked bank with a $180 million fine for anti-money laundering violations.

Mega Bank, a $103 billion Taiwanese bank with one New York office, ignored the risks associated with transactions involving Panama, a high-risk area for money laundering, the state Department of Financial Services said in a statement on Friday.

The bank had “suspicious” accounts that were formed with the help of Mossack Fonseca, the law firm at the center of the “Panama Papers” leak, which revealed companies and wealthy individuals who dodged taxes, the DFS said.

 The bank had lax controls and relied on untrained personnel, including a chief compliance officer who wasn’t familiar with anti-money-laundering rules.

Breaking news: U.S. expands investigation into money laundering by foreign cash buyers

The federal government revealed Wednesday that its investigation into foreign buyers using high-end U.S. real estate as a means to launder money found that potentially illicit activity is behind a “significant” portion of the cash transactions in Manhattan and Miami, and plans to expand the investigation into several other areas.

Earlier this year, the Treasury Department’s Financial Crimes Enforcement Network stated that it was “concerned about illicit money” being used to buy luxury real estate, and planned to begin identifying and tracking the previously unknown buyers who used shell companies to hide their identities.

At the time, FinCEN issued a “Geographic Targeting Order” that required title insurance companies in Manhattan and Miami-Dade County to identify the actual person behind shell companies used to pay all cash for high-end residential real estate in those two areas.

In a call with reporters on Wednesday, a FinCEN official stated that more than 25% of transactions covered in the initial inquiry involved a “beneficial owner” that is also subject of a “suspicious activity report,” which is an indication of possible criminal activity.

Read on.

Trump’s manager Paul Manafort was once sued by Fmr. Ukrainian Prime Minister for ‘scheming’ and ‘money laundering’

On the heels of the DNC email leaks, Hillary Clinton‘s campaign manager, Robby Mookpointed the finger squarely at the Russians and said that the emails were leaked to help elect Donald Trump. As a result, there has been much talk about Trump’s campaign and ties to Russia. Many Democrats are specifically bringing up the fact that Trump’s campaign manager, Paul Manafort, recently consulted for pro-Russian politicians in the Ukraine, including helping former Ukrainian Prime Minister Viktor Yanukovych (a Vladimir Putin ally).

LawNewz.com did some digging into those alleged ties, and discovered that for several years Manafort was also caught up in a lawsuit filed by former Ukranian Prime Minister Yulia Tymoshenko.She accused Manafort and others of funneling money into the United States to help pay Ukrainian prosecutors and supporters of Viktor Yanukovych who in 2010 narrowly defeated Tymoshenko to become Ukraine’s president.  After four years of litigation, the lawsuit was dismissed in 2015 by a Manhattan federal judge. Attorneys denied Manafort had any involvement.

The lawsuit centers around what Tymoshenko called politically motivated prosecutions against her. Tymoshenko, who served as the first female Prime Minister from 2007 to 2010, faced criminal charges for alleged involvement with a gas import contract signed with Russia. She was ultimately released from prison in 2014 after a revision of the Ukranian criminal code that decriminalized the actions for which she was convicted. At around the same time, Yanukovych was ousted from power. She has long held that the prosecutions against her were unjust, corrupt and were motivated purely by politics.

In 2011, Tymoshenko filed a lawsuit in the U.S. District Court in the Southern District of New York against Ukranian industrialist Dmytro Firtash, and others for allegedly running a U.S. based racketeering enterprise which stood to benefit financially from her prosecution. One of the named defendants in the lawsuit is none of other than Paul Manafort.

Read on.

U.S. sides with HSBC to block release of money laundering report

The U.S. government asked a federal appeals court on Thursday to block the release of a report detailing how HSBC Holdings Plc is working to improve its money laundering controls after the British bank was fined $1.92 billion.

In a brief filed with the 2nd U.S. Circuit Court of Appeals, the U.S. Department of Justice sought to overturn an order issued earlier this year by U.S. District Judge John Gleeson to make a report by the bank’s outside monitor public.

“Public disclosure of the monitor’s report, even in redacted form, would hinder the monitor’s ability to supervise HSBC,” the government’s court filing said, adding that bank employees would be less likely to cooperate with the monitor if they knew their interactions could be released.

A spokesman for the Justice Department declined to comment. HSBC did not immediately respond to a request for comment.

The filing comes a week after U.S. congressional investigators criticized senior officials at the Department of Justice for overruling internal recommendations to criminally prosecute HSBC for money-laundering violations.

Instead, the government in 2012 fined HSBC and entered into a five-year deferred prosecution agreement that stipulated all charges would be dropped if the bank agreed to install an independent monitor to help improve compliance.

Read on.

Top Banking Committee Rep. Waters Reprimands Loretta Lynch For Going Easy On Wall Street

It’s about time!!!

WASHINGTON ― Rep. Maxine Waters (D-Calif.) sent a sharply worded letter to Attorney General Loretta Lynch on Friday, calling on the government’s top lawyer to rescind a drug money laundering settlement with HSBC and bring criminal charges against the British financial titan’s employees.

Under the standards of Beltway etiquette, it’s a provocative move for a Democratic congresswoman in a leadership position ― Waters is the ranking member of the powerful House Financial Services Committee ― to publicly challenge a sitting Democratic cabinet member. But Waters’ letter is particularly biting for another reason: Lynch was personally in charge of the HSBC investigation that infuriated financial reform advocates in December 2012, while she was U.S. Attorney for the Eastern District of New York.

“I have long criticized the apparent two-tiered American justice system that subjects low-level criminal offenders to harsh prison sentences that completely upend their lives and compromise their futures, while allowing the perpetrators of major financial crimes to be largely shielded from criminal prosecution,” Waters wrote Friday.

The HSBC deal, known technically as a deferred prosecution agreement or DPA, settled charges that the company laundered $881 million for the Sinaloa and Norte del Valle drug cartels and violated U.S. government sanctions against Iran, Libya, Sudan and other countries. The bank paid the feds $1.9 billion and no bankers were prosecuted. Waters wasn’t happy at the time, and needled then-Attorney General Eric Holder about the deal in 2013.

But roughly two years after Lynch finalized the deal, reports surfaced showing that an HSBC whistleblower had turned over information to the DOJ suggesting that the firm’s Swiss unit had engaged in massive tax evasion efforts. The documents reached the department during Lynch’s money laundering investigation, which never mentioned anything about tax evasion; Lynch said her office never saw the documents.

Read on.

Eric Holder’s Longtime Excuse for Not Prosecuting Banks Just Crashed and Burned

Great reporting, David!

Eric Holder has long insisted that he tried really hard when he was attorney general to make criminal cases against big banks in the wake of the 2007 financial crisis. His excuse, which he made again just last month, was that Justice Department prosecutors didn’t have enough evidence to bring charges.

Many critics have long suspected that was bullshit, and that Holder, for a combination of political, self-serving and craven reasons, held his department back.

A new, thoroughly-documented report from the House Financial Services Committee supports that theory. It recounts how career prosecutors in 2012 wanted to criminally charge the global bank HSBC for facilitating money laundering for Mexican drug lords and terrorist groups. But Holder said no.

When asked on June 8 why his Justice Department did not equally apply the criminal laws to financial institutions in the wake of the 2008 economic crisis, Holder told the platform drafting panel of the Democratic National Committee that it was laboring under a “misperception.”

He told the panel: “The question you need to ask yourself is, if we could have made those cases, do you think we would not have? Do you think that these very aggressive U.S. Attorneys I was proud to serve with would have not brought these cases if they had the ability?”

The report — the result of a three-year investigation — shows that aggressive attorneys did want to prosecute HSBC, but Holder overruled them.

In September 2012, the Justice Department’s Asset Forfeiture and Money Laundering Section (AFMLS) formally recommended that HSBC be prosecuted for its numerous financial crimes.

The history: From 2006 to 2010, HSBC failed to monitor billions of dollars of U.S. dollar purchases with drug trafficking proceeds in Mexico. It also conducted business going back to the mid-1990s on behalf of customers in Cuba, Iran, Libya, Sudan, and Burma, while they were under sanctions. Such transactions were banned by U.S. law.

Newly public internal Treasury Department records show that AFMLS Chief Jennifer Shasky wanted to seek a guilty plea for violations of the Bank Secrecy Act. “DoJ is mulling over the ramifications that could flow from such an approach and plans to finalize its decision this week,” reads an email from September 4, 2012 to senior Treasury officials. On September 7, Treasury official Dennis Wood describes the AFMLS decision as an “internal recommendation to ask the bank [to] plead guilty.” It was a “bombshell,” Wood wrote, because of “the implications of a criminal plea” and “the sheer amount of the proposed fines and forfeitures.”

Read on.

And where is  AFMLS Chief Jennifer Shasky? She resigned as the head of the Financial Crimes Enforcement Network to become a senior compliance officer with HSBC.(revolving door).

And who can forget former DOJ head of Criminal Division Lanny Breuer (who now returned to along with Eric Holder to work for Covington & Burling) interview on PBS Frontline.  In the short clip, PBS Frontline reporters explained why US regulators failed to prosecute any bankers for fraud relating to the Global Financial Crisis.






JULY 11, 2016

Executive Summary

In March 2013, the Committee on Financial Services (Committee) initiated a
review of the U.S. Department of Justice’s (DOJ’s) decision not to prosecute HSBC
Holdings Plc. and HSBC Bank USA N.A. (together with its affiliates, HSBC) or any
of its executives or employees for serious violations of U.S. anti-money laundering
(AML) and sanctions laws and related offenses. The Committee’s efforts to obtain
relevant documents from DOJ and the U.S. Department of the Treasury (Treasury)
were met with non-compliance, necessitating the issuance of subpoenas to both
agencies. Approximately three years after its initial inquiries, the Committee
finally obtained copies of internal Treasury records showing that DOJ has not been
forthright with Congress or the American people concerning its decision to decline
to prosecute HSBC. Specifically, these documents show that:

  • Senior DOJ leadership, including Attorney General Holder, overruled an
    internal recommendation by DOJ’s Asset Forfeiture and Money Laundering
    Section to prosecute HSBC because of DOJ leadership’s concern that
    prosecuting the bank would have serious adverse consequences on the
    financial system.
  • Notwithstanding Attorney General Holder’s personal demand that HSBC
    agree to DOJ’s “take-it-or-leave-it” deferred prosecution agreement deal by
    November 14, 2012, HSBC appears to have successfully negotiated with DOJ
    for significant alterations to the DPA’s terms in the weeks following the
    Attorney General’s deadline.
  • DOJ and federal financial regulators were rushing at what one Treasury
    official described as “alarming speed” to complete their investigations and
    enforcement actions involving HSBC in order to beat the New York
    Department of Financial Services.
  • In its haste to complete its enforcement action against HSBC, DOJ
    transmitted settlement numbers to HSBC before consulting with Treasury’s
    Office of Foreign Asset Control (OFAC) to ensure that the settlement amount
    accurately reflected the full degree of HSBC’s sanctions violations.
  • The involvement of the United Kingdom’s Financial Services Authority in the
    U.S. government’s investigations and enforcement actions relating to HSBC,
    a British-domiciled institution, appears to have hampered the U.S.
    government’s investigations and influenced DOJ’s decision not to prosecute
  • Attorney General Holder misled Congress concerning DOJ’s reasons for not
    bringing a criminal prosecution against HSBC.
    ? DOJ to date has failed to produce any records pertaining to its prosecutorial
    decision making with respect to HSBC or any large financial institution,
    notwithstanding the Committee’s multiple requests for this information and
    a congressional subpoena requiring Attorney General Lynch to timely
    produce these records to the Committee.
  • Attorney General Lynch and Secretary Lew remain in default on their legal
    obligation to produce the subpoenaed records to the Committee.
  • DOJ’s and Treasury’s longstanding efforts to impede the Committee’s
    investigation may constitute contempt and obstruction of Congress.
    The Committee is releasing this report to shed light on whether DOJ is
    making prosecutorial decisions based on the size of financial institutions and DOJ’s
    belief that such prosecutions could negatively impact the economy.

Here is the report. Click here.

Deutsche Bank failing to limit crimes: watchdog

Deutsche Bank hasn’t done enough to prevent its accounts from being misused to launder money, circumvent international sanctions or even finance terrorism, the UK’s financial regulatory agency has found.

The British branch of Germany’s largest lender has “serious” and “systemic” shortcomings in its controls against those three kinds of illegal activity, the Financial Conduct Authority (FCA) said Monday, according to a letter seen a day earlier by the Financial Times newspaper.

“Our overall conclusion was that DB UK had serious AML (anti-money laundering), terrorist financing and sanctions failings which were systemic in nature,” the FT quoted the letter as saying.

The damning claim was made after the FCA spent a year conducting an in-depth evaluation of 14 large banks, including Deutsche. The regulators said the bank had also failed to impress due to missing documents, a lack of transaction monitoring and inappropriate pressure being put on employees to take on certain clients, the FT said.

Read on.