5 Outrageous Revelations from Matt Taibbi's Takedown on HSBC's Drug Money Laundering
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4. HSBC did direct business with “the worst trafficking organizations imaginable.”
A part of a major narcotics investigation, federal agents discovered a ton of evidence that implicated HSBC in widespread money laundering. For example, Taibbi reports the bank “played a key role in the so-called Black Market Peso Exchange, which allowed drug cartels in both Mexico and Colombia to convert U.S. dollars from drug sales into pesos to be used back home.” And the dealers HSBC did business with were some of the most violent in the world.
Former federal prosecutor Neil Barofsky told Rolling Stone HSBC worked for Colombia's Norte del Valle and Mexico's Sinaloa cartels — “groups that don't just commit murder on a mass scale but are known for beheadings, torture videos and other atrocities, none of which happens without money launderers.”
Barofsky says he once put a Notre del Valle cartel member behind bars for 10 years on money laundering charges far smaller than what HSBC was involved with.
5. An entire HSBC department was tasked with quickly clearing suspicious behavior
After the OCC sent HSBC its second cease-and-desist letter, the bank hired a bunch of unqualified workers to “investigate” suspicious alerts. In reality, the Delaware-based department was tasked with clearing out skeletons from HSBC’s closet. Taibbi quotes damning emails from HSBC bosses pressuring workers to clear as many alerts as possible, and praising the entire Delaware office when it erased 60 suspicious transactions in a week.
Taibbi interviewed one of these “investigators,” Everett Stern, who described laughably low criteria for clearing an alert.
"Basically, if a company had a website, you could clear them," he told Rolling Stone.
Stern found a slew of suspicious transactions that he was hired to scrub away, including exchanges tied to Hezbollah, Iran and the Muslim Brotherhood. He decided to turn whistleblower and alert the FBI.
After that, Lanny Breur slapped HSBC with a deferred prosecution agreement.
"I thought, 'All that, for nothing?' " Stern told Rolling Stone. "I couldn't believe it."