HSBC to pay at least $1.9B in laundering probe

From staff and wire reportsShare

6:12PM EST December 10. 2012 - WASHINGTON (AP) — A law enforcement official says HSBC will pay $1.9 billion to settle a money-laundering probe by federal and state authorities into Europe's biggest bank.

According to the official, the bank will pay $1.25 billion in forfeiture and pay $655 million in civil penalties. The $1.25 billion figure is the largest forfeiture ever in a case involving a bank. Under what is known as a deferred prosecution agreement, the bank will be accused of violating the Bank Secrecy Act and the Trading With the Enemy Act.

The official spoke on condition of anonymity Monday because the source was not authorized to speak about the matter on the record.

In July, the Senate Permanent Subcommittee on Investigations held a hearing on the London-based bank's operations after conducting a year-long probe.
"HSBC used its U.S. bank as a gateway into the U.S. financial system for some HSBC affiliates around the world to provide U.S. dollar services to clients while playing fast and loose with U.S. banking rules," panel chairman Sen. Carl Levin, D-Mich., said when the report was released. "Due to poor (anti-money laundering) controls, (HSBC's U.S. division) exposed the United States to Mexican drug money, suspicious travelers cheques, bearer share corporations, and rogue jurisdictions."

HSBC declined to comment directly on the issue Monday evening. "As we've previously disclosed in financial filings, we are cooperating with authorities in ongoing investigations. The nature of any conversations is confidential," said bank spokesman Rob Sherman.

The London-based bank says it is cooperating with investigations but that those discussions are confidential.

http://www.usatoday.com/story/money/business/2012/12/10/hsbc-settlement-money-laundering/1759619/