>Without adequate KYC information, HSBC Mexico knew very little about who these high risk customers were or why they had such large amounts of U.S. dollars. However, even without the benefit of adequate KYC information, the risks were obvious. Indeed, one HSBC Mexico compliance officer noted “the massive misuse of [the HSBC Mexico Cayman Islands U.S. dollar accounts] by organized crime.” One example, identified by HSBC Group’s Head of Compliance in July 2008, involved “significant USD remittances being made by a number of [HSBC Mexico’s Cayman Islands U.S. dollar] customers to a US company alleged to be involved in the supply of aircraft to drug cartels.”
Or this?
>When suspicious activity was identified, HSBC Mexico
repeatedly failed to take action to close the accounts. Senior business executives at HSBC Mexico repeatedly overruled recommendations from its own AML committee to close accounts with documented suspicious activity.
Or the part where HSBC Mexico was laundering so much money that both the Mexican Central Bank and the Mexican Financial Intelligence Division both complained to them within 6 months of each other?
>In November 2007, Banco de Mexico, the central bank of Mexico, expressed concerns about the volume of U.S. dollars exported by HSBC Mexico back to the United States. Specifically, Banco de Mexico wanted an explanation as to why HSBC Mexico’s U.S. dollar exports were significantly larger than its market share would suggest.
In February 2008, HSBC Mexico’s CEO met with the head of
the CNBV and the head of Mexico’s financial intelligence unit, Unidad de Inteligencia Financiera (“UIF”). Again, the volume of HSBC Mexico’s U.S. dollar exports was raised as a concern. Specifically, HSBC Mexico’s CEO was told that law enforcement in Mexico and the United States were seriously concerned that the U.S. dollars being deposited at HSBC Mexico might represent drug trafficking proceeds. HSBC Mexico’s CEO was also told that Mexican law enforcement possessed a recording of a Mexican drug lord saying that HSBC Mexico was the place to launder money.
Or my personal favorite, where the cartels designed special boxes to maximize the rate at which they could shove their dirty money through the teller windows:
>In order to efficiently move this volume of cash through the teller windows at HSBC Mexico branches, drug traffickers designed specially shaped boxes that fit the precise dimensions of the teller windows. The drug traffickers would send numerous boxes filled with cash through the teller windows for deposit into HSBC Mexico accounts.
And before you tell me that this was limited to HSBC Mexico:
>Senior HSBC Group executives, including the CEO, Head of Compliance, Head of Audit, and Head of Legal, were all aware that the problems at HSBC Mexico involved U.S. dollars and U.S. dollar accounts.
Huh? Why do you think it is appropriate for the US government to be regulating the behavior of a foreign bank in a foreign country? I have a business account at HSBC in Hong Kong. It stores assets in USD and it is none of your or your government's business. I had assumed the US bank somehow violated American law, because if the only complaints are about the behavior of the Mexican bank, the whole thing smells like a political shakedown.
By your logic the Chinese government should be fining American banks (i.e. Citibank) which offer RMB<-->USD conversion services outside China. Because, after all, the RMB is a controlled currency in China and the behavior of American banks is illegal under Chinese law.
> Huh? Why do you think it is appropriate for the US government to be regulating the behavior of a foreign bank in a foreign country?
That's quite the straw man you've set up. I don't believe I ever once said anything like that.
I do think it is appropriate for the US to regulate the operations of a foreign bank within their boarders. If the multinational bank violated US law, the multinational bank and its US subsidiaries should lose their ability to continue to conduct business in the US. You know, like what DHS is doing to Mt Gox now, which was the whole point of this thread in the first place.
> That's quite the straw man you've set up. I don't believe I ever once said anything like that.
Huh? Your post goes on and on accusing HSBC Mexico of malfeasance yet does not contain a single accusation of wrongdoing on the part of any American subsidiary or company.
As far the MtGox issue goes, DHS has shut down an American account belonging to an American company (a subsidiary explicitly created in the US to process USD). It is an entirely different matter.
The document outlines in unambiguous terms the extent to which HSBC (the parent HSBC) consistently, knowingly, and over an extended period of time, manipulated transactions and associated processes, at times over the objections of their own US subsidiaries, to conduct business, in America, in US Dollars, that was in violation of AML laws and regulations.
I'm not sure what else there's left to say about this at this point.
How about this part?
>Without adequate KYC information, HSBC Mexico knew very little about who these high risk customers were or why they had such large amounts of U.S. dollars. However, even without the benefit of adequate KYC information, the risks were obvious. Indeed, one HSBC Mexico compliance officer noted “the massive misuse of [the HSBC Mexico Cayman Islands U.S. dollar accounts] by organized crime.” One example, identified by HSBC Group’s Head of Compliance in July 2008, involved “significant USD remittances being made by a number of [HSBC Mexico’s Cayman Islands U.S. dollar] customers to a US company alleged to be involved in the supply of aircraft to drug cartels.”
Or this?
>When suspicious activity was identified, HSBC Mexico repeatedly failed to take action to close the accounts. Senior business executives at HSBC Mexico repeatedly overruled recommendations from its own AML committee to close accounts with documented suspicious activity.
Or the part where HSBC Mexico was laundering so much money that both the Mexican Central Bank and the Mexican Financial Intelligence Division both complained to them within 6 months of each other?
>In November 2007, Banco de Mexico, the central bank of Mexico, expressed concerns about the volume of U.S. dollars exported by HSBC Mexico back to the United States. Specifically, Banco de Mexico wanted an explanation as to why HSBC Mexico’s U.S. dollar exports were significantly larger than its market share would suggest.
In February 2008, HSBC Mexico’s CEO met with the head of the CNBV and the head of Mexico’s financial intelligence unit, Unidad de Inteligencia Financiera (“UIF”). Again, the volume of HSBC Mexico’s U.S. dollar exports was raised as a concern. Specifically, HSBC Mexico’s CEO was told that law enforcement in Mexico and the United States were seriously concerned that the U.S. dollars being deposited at HSBC Mexico might represent drug trafficking proceeds. HSBC Mexico’s CEO was also told that Mexican law enforcement possessed a recording of a Mexican drug lord saying that HSBC Mexico was the place to launder money.
Or my personal favorite, where the cartels designed special boxes to maximize the rate at which they could shove their dirty money through the teller windows:
>In order to efficiently move this volume of cash through the teller windows at HSBC Mexico branches, drug traffickers designed specially shaped boxes that fit the precise dimensions of the teller windows. The drug traffickers would send numerous boxes filled with cash through the teller windows for deposit into HSBC Mexico accounts.
And before you tell me that this was limited to HSBC Mexico:
>Senior HSBC Group executives, including the CEO, Head of Compliance, Head of Audit, and Head of Legal, were all aware that the problems at HSBC Mexico involved U.S. dollars and U.S. dollar accounts.