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HSBC's Money Laundering Scandal (2022)

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Re: HSBC's Money Laundering Scandal (2022)

#11

Post by ur-whale »

jalapenos wrote: post #6

The unfortunate outcomes of these events is that, like a ratchet, it just gets harder and harder for ordinary citizens to go about their lives. It used to be that you could just walk into a bank and open an account on the spot. And it's still like that in many developing countries. It's now at the point that just having a bank account is becoming an asset in itself. It's an increasingly major process to open one, and…

I agree with you very much.

And you're not even touching the other part, which is that when you get in the cross-hair of the authorities (even if they happen to have a legitimate reason, which more often than not, they don't) your money can cease to be yours in the blink of an eye, leaving you with absolutely no means to defend yourself.

We need far better legal protection for our assets than what currently exist in most so-called civilized countries.

I would go as far as saying that the right to protect your assets from anyone is as deeply important than the right to free speech.

And this is why crypto, in spite of all its purported shortcomings, holds such a deep gut appeal to very many people: at an instinctive level, they can feel it's the last resort to protecting your freedom from the predatory institutions that are supposed to be protecting them.

Re: HSBC's Money Laundering Scandal (2022)

#12

Post by specialist »

Asking because I don't know how to find out...

Which large banks are scandal free?

I don't mean perfidy, like the 2009 mortgage crisis or LIBOR or using bail out money for bonuses or helping clients with tax avoidance.

I mean straight up no doubt illegal and criminal stuff. Laundering, bribes, violating sanctions, and so forth.

Re: HSBC's Money Laundering Scandal (2022)

#13

Post by noNothing »

Many years ago I did some work at a large race track and they were very concerned about money laundering. They worked closely with the local authorities to recognize any potential issues. I guess it all depends on the companies leaders as to what they want to risk.

There are many opportunities to be complicit. Illegal exports, selling customer information, aiding money laundering, ... It seems wrong that petty criminals server harsher penalties than corporate leaders (or politicians) even though the corporate leaders commit worse crimes.

Re: HSBC's Money Laundering Scandal (2022)

#14

Post by loeg »

fogforthought93 wrote: post #9
gadders wrote: post #8

Earlier quoted context omitted.

These aren't business decisions taken to corner the money laundering market for Mexican cartels. It's more like Mexican cartels try all the banks to see which ones they can launder money through, and when they find one with poor controls that allow it they double-down on using that bank until their activity is stopped. Maybe at the country level they were happy with the transaction fees, but I would be surprised if i…

Do you have a source for the claim that drug cartels "try all the banks to see which ones they can launder money through"? I don't believe that's how it works at all. If you read, for example Drug Cartels Do Not Exist by Oswaldo Zavala, you'll see that this money is fundamental to how global finance operates. Drug money provided the necessary liquidity to keep the world finance system from crashing in '08. It's the m…

That is an exceptionally contrarian claim.

Re: HSBC's Money Laundering Scandal (2022)

#15

Post by csomar »

jalapenos wrote: post #6

The unfortunate outcomes of these events is that, like a ratchet, it just gets harder and harder for ordinary citizens to go about their lives. It used to be that you could just walk into a bank and open an account on the spot. And it's still like that in many developing countries. It's now at the point that just having a bank account is becoming an asset in itself. It's an increasingly major process to open one, and…

I'm not sure if it's a conspiracy to control the public, or simply regulators being irresponsibly incompetent that it can be considered criminal.

Most of the KYCs in the developing world can be ignored by handing $50-200 over to the right couple of people. Most of KYCs in the developed world will be handled by specialized "consultants" who will handle the paper work and deliver the needed banking services. It's the same thing but it costs more in the developed world, huh.

I'm glad you brought this up as I am at loss how most of the people accept this sad state of affairs.

Re: HSBC's Money Laundering Scandal (2022)

#16

Post by mnau »

bitcharmer wrote: post #7
albntomat0 wrote: post #4

Earlier quoted context omitted.

It's possible this was started by some sub-org within HSBC, where 881M would be a large fraction of that org's size. The management layer above them then doesn't look too deeply, or ensure prior compliance procedure, while promoting and giving bonuses to those who hit high numbers.

This is exactly how these things happen. In an organisation that employs quarter of a million employees it's impossible to have perfect transparency and controls everywhere. At this scale you just have to trust that people below you do the right thing. That's not to say there should be no criminal charges for individuals. Just explaining how this transpired.

It's responsibility of the CEO/BoD to ensure compliance. At that size and in that market, compliance departments are huge.

We get regular audits of our work by an outside company. The exact auditing company rotate to ensure no incompetence/cronyism hides something.

As the article states:

> Indeed, prior to 2010 when the OCC cited the bank for many AML deficiencies—including a huge backlog of unreviewed accounts and failure to file Suspicious Activity Reports (SARs)—for the previous six years the agency failed to take any enforcement action against the bank

Re: HSBC's Money Laundering Scandal (2022)

#17

Post by csomar »

ur-whale wrote: post #11
jalapenos wrote: post #6

The unfortunate outcomes of these events is that, like a ratchet, it just gets harder and harder for ordinary citizens to go about their lives. It used to be that you could just walk into a bank and open an account on the spot. And it's still like that in many developing countries. It's now at the point that just having a bank account is becoming an asset in itself. It's an increasingly major process to open one, and…

I agree with you very much. And you're not even touching the other part, which is that when you get in the cross-hair of the authorities (even if they happen to have a legitimate reason, which more often than not, they don't) your money can cease to be yours in the blink of an eye, leaving you with absolutely no means to defend yourself. We need far better legal protection for our assets than what currently exist in…

> cross-hair of the authorities (even if they happen to have a legitimate reason, which more often than not, they don't) your money can cease to be yours in the blink of an eye, leaving you with absolutely no means to defend yourself.

It's worse than that. Fintech can freeze your money at their sole discretion. It's a puzzle to get the money unfrozen. My guess is that banks will be next, although they seem to do better now. But this practice is protected by the law.

Re: HSBC's Money Laundering Scandal (2022)

#18

Post by photochemsyn »

Why aren't bankers who launder billions for drug cartels given the kind of multi-decade federal prison sentences that 25-yr-old kids smuggling a few kilos of cocaine from Mexico to the United State are?

It certainly makes it look like outfits like the FBI and DEA are little more than the enforcement arms of an organized white-collar crime cartel operating out of Wall Street offices, doesn't it? Amusingly James Comey (future FBI chief) got an 'advisory legal job' with HSBC after this scandal, which certainly looks like payola. Maybe bank robbers could also get out of prison time by hiring ex-FBI agents to advise them on how to not rob banks anymore?

And yes, you can still find all the cocaine or fentanyl or methamphetamine you want with ease in any city in the USA, and it's still being shipped by the cartels, and they're still laundering the profits through the banking system and the real estate property markets, same as they've been doing since the 1980s at least.

Re: HSBC's Money Laundering Scandal (2022)

#19

Post by cscurmudgeon »

dig1 wrote: post #10

What banks are doing is "a regular cycle" of modern capitalism (although this sounds like nonsense) - greed. This time was HSBC, yesterday was Deutsche, and tomorrow, who knows. I'd suggest reading a light book from Yanis Varoufakis called "Talking to My Daughter About the Economy: or, How Capitalism Works--and How It Fails" [1], where he explains how this cycle fuels the synergy of a modern economy, capitalism, and…

> What banks are doing is "a regular cycle" of modern capitalism (although this sounds like nonsense) - greed.

This is not capitalism though. Like True socialism/communism, True Capitalism has never been tried. This is all crony capitalism with state protection.

Re: HSBC's Money Laundering Scandal (2022)

#20

Post by dankboys »

metadat wrote: post #2

> In this case, HSBC provided money-laundering services of more than $881 million to various drug cartels including Mexico’s Sinaloa cartel and Colombia’s Norte del Valle cartel. This included bulk movements of cash from the bank's Mexican unit to the U.S., with little or no oversight of the transactions. It also conducted transactions with Iran, removing references to the country in an effort to conceal them. Only $…

One of the key bits is that the cartel worked out the OFAC check by HSBC was shitty so could add spaces etc to bypass it. It wasn't a conscious decision, but a failure of their process.
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