WHY NO CRIMINAL PENALTIES FOR MONEY LAUNDERING? IS OUR ADMINISTRATION COMPLICIT!

Based upon this and other reports I’ve read and my former experience as a bank examiner with direct BSA regulatory experience, the HSBC crooks were directly involved in placement, structuring, layering, and implementation of the money laundering enterprise.  They were willful, intentional, and purposeful criminal acts, including attempting to circumvent the BSA laws.  As you can see, separate charges and convictions can lead up to 20 years in prison. 

Of course, the cases have to be tried first.  Based upon my direct experience in exposing illegal kickbacks in the title company/real estate industry, the US Treasury, HUD, DOJ/FBI and other corrupted law enforcement agencies and officials use “settlements” (i.e. IT”S ALL A CIVIL MATTER”) to allow the perpetrators to avoid individual prosecution.  In many instances, the fines represent penalties on the dollar (benefit was far greater than the settlement amount).  Bank was fined the maximum 2X of suspected profits, but who knows how much was done that was not uncovered.

As I’ve indicated before, the deterrent for such activities no longer exists because of the failure to prosecute willful, criminal, and purposeful criminal acts including real estate fraud, racketeering, and corruption.  Occasional, obvious (no-brainer),and political ones like Bernie Made-off and Blagojevich don’t count.  Examples need to be made of criminals like these, and if it means life imprisonment with hard labor busting rocks and making license plates, or capital punishment for drug trafficking, then so be it.

Criminal Penalties for Money Laundering, Terrorist Financing, and Violations of the BSA 

Penalties for money laundering and terrorist financing can be severe. A person convicted of money laundering can face up to 20 years in prison and a fine of up to $500,000.¹² Any property involved in a transaction or traceable to the proceeds of the criminal activity, including property such as loan collateral, personal property, and, under certain conditions, entire bank accounts (even if some of the money in the account is legitimate), may be subject to forfeiture. Pursuant to various statutes, banks and individuals may incur criminal and civil liability for violating AML and terrorist financing laws. For instance, pursuant to 18 USC 1956 and 1957, the U.S. Department of Justice may bring criminal actions for money laundering that may include criminal fines, imprisonment, and forfeiture actions.¹³ In addition, banks risk losing their charters, and bank employees risk being removed and barred from banking.

Moreover, there are criminal penalties for willful violations of the BSA and its implementing regulations under 31 USC 5322 and for structuring transactions to evade BSA reporting requirements under 31 USC 5324(d). For example, a person, including a bank employee, willfully violating the BSA or its implementing regulations is subject to a criminal fine of up to $250,000 or five years in prison, or both.¹⁴ A person who commits such a violation while violating another U.S. law, or engaging in a pattern of criminal activity, is subject to a fine of up to $500,000 or ten years in prison, or both.¹⁵ A bank that violates certain BSA provisions, including 31 USC 5318(i) or (j), or special measures imposed under 31 USC 5318A, faces criminal money penalties up to the greater of $1 million or twice the value of the transaction.¹⁶

http://www.ffiec.gov/bsa_aml_infobase/pages_manual/OLM_002.htm

Bank Takes Drug Money, Gets Handslap

The “surprises “just keep coming, don’t they? HSBC Holdings Plc (HSBA)’s Mexican branches had become so well-known to drug traffickers as the place to launder proceeds from illicit sales that cartels began using special boxes to speed transactions, U.S. prosecutors said. From 2006 to 2010, the Sinaloa cartel in Mexico and the Norte del Valle Cartel in Columbia moved more than $881 million in proceeds through HSBC’s U.S. unit, said Lanny Breuer, assistant attorney general for the U.S. Justice Department’s criminal division. Breuer, along with U.S. Attorney Lorretta Lynch in Brooklyn, New York, announced yesterday the bank had agreed to pay at least $1.9 billion to settle money laundering probes. Number of banksters in prison?  Zero. Who will “pay” this fine?  HSBC’s customers and shareholders, neither of whom did anything wrong. “We accept responsibility for our past mistakes,”Gulliver said in a statement. “We have said we are profoundly sorry for them, and we do so again. The HSBC of today is a fundamentally different organization from the one that made those mistakes.” I’m sure they are profoundly sorry – that they got caught. Treasury called this “egregious breakdown in anti-money laundering compliance.” I’d say so, when the dopers are sizing the packages they deposit so as to insure they fit through the deposit windows. That’s not suspicious, is it? The bank engaged in payment practices that violated U.S. law and interfered with economic sanctions, such as forwarding messages to U.S. banks that said that an HSBC affiliate was the ordering institution and not individuals or entities subject to U.S. sanctions, Cohen said. At least once, HSBC told a bank in Iran how to format payment messages so the U.S. wouldn’t block or reject the transactions, Breuer said. Oh, it’s better.  The government alleges that the bank intentionally circuvented the law.  Not that it looked the other way, but that itactively participated in the formatting of messages so as to evade surveilance. The decision not to prosecute HSBC was a decision of the Justice Department and was influenced by factors including the impact of the probe on the company’s employees and the potential economic effect, Breuer said. In other words if you get big enough and can threaten the government, you can do whatever the hell you want and at worst, if you get caught, you might pay a fine. That’s a nice business arrangement if you can manage to be one of the few able to abuse it. We will have exactly no progress on repairing what’s wrong with our financial system until this sort of behavior leads to handcuffs and revoked charters.