Dirty Money (2018) s01e04 Episode Script

1 This is the rare Wall Street case that the person on the street can understand.
The amounts of money involved were massive.
Sometimes millions of dollars.
Billions of dollars.
Money that was being laundered from Mexican drug cartels.
Drug lords, terrorists, they were facilitating these criminals.
It's greed, that's all it is.
It's greed.
At HSBC, we're committed to helping protect the financial system on which millions of people depend by only doing business with customers who meet our high standards of transparency.
The world's local bank, HSBC.
HSBC stands for the Hong Kong and Shanghai Banking Corporation.
It is a huge global institution with, frankly, a kind of indifference to the people that it was doing business with and the laws that govern financial services operations.
There were hundreds of billions of dollars in transactions that were not monitored.
It's basic, simple money laundering and HSBC had its hand right in the middle of it.
Drug cartels themselves said, in their own words, it is the place to bank.
Everybody's seen Scarface, where the guy walks into the bank with the duffle bags full of cash.
That was HSBC.
By working together, with each of us playing our part, we are leading the fight against financial crime, helping businesses to grow and communities to thrive.
HSBC, together protecting a world of opportunity.
These banks, they move millions for the cartels every day and every dollar is helping to kill people in Mexico.
Being a journalist in Mexico is very dangerous.
I received threats of death and my family received gun attacks.
I mean, many of my sources were kidnapped or murdered.
My father was the most important figure in my life.
When I told my father that I wanted to be a journalist, he was very angry with me.
He hated me.
He said, "You cannot be a jour-- Is that a profession?" Because in those years, in Mexico, many of the media were very corrupt.
They were accepting bribes from the government.
That was an old tradition.
And I said, "No, I want to be a journalist and I will be a very different journalist.
" I remember that when I published my first story, when my father saw this, he really changed his mind about that.
So my father was very proud of me and of my job.
In December 2000, my father was kidnapped and murdered.
And that changed my life forever.
Because when we went to claim for justice, the police asked us for money.
They said, "If you want me to investigate, you have to pay.
" When, at a distance, you see the injustice, the corruption, it's one thing.
But when you suffer this injustice and the corruption, your point of view of the things change completely, change your life.
So, I really started to do another kind of journalism.
Journalist Anabel Hernández has spent five years investigating the cartels and the toll they've taken on Mexico.
Hernández published a groundbreaking book linking top Mexican officials to the world's most powerful drug cartels.
The drug cartels are really destroying my country.
Just this year between January and July, 10,000 people have been murdered in Mexico by the drug cartels.
Another 24 hours of terror in Ciudad Juárez.
Fifteen teenagers gunned down at a birthday party including Luz Maria Davila's only two children.
Mexican soldiers and police rushed to evacuate several schools, all signs of surging violence.
Vicious cartels battling to control the $14-billion-a-year illicit trade, feeding an insatiable US appetite for drugs.
The increase in violence kept going up little by little, especially in zones where these drugs are produced and in the border areas where they cross into the United States.
It's a very surreal experience because I grew up here.
I grew up going to Ciudad Juárez.
That was our place to go visit and eat and visit family.
And so it almost was very unreal for me that this violence was happening in a place that I love.
These cartels are considered terrorist organizations in the sense that you wouldn't know the difference between the violence sometimes between ISIS and al-Qaeda, versus the drug cartels, the Sinaloa, the Juarez cartel, the Gulf cartel, because of the level of barbarity that they have.
The business is not the violence, the business is not murdering people.
The business is trafficking drugs to get money.
A lot of money.
Millions of dollars, that is the goal.
All the-- If you have to kill, if you have to pay bribes, if you have to destroy one country, it's an accident.
The goal is the money.
The drugs come north, and the money goes south.
It's a cycle that continues over and over.
Cross-border smuggling has been going on ever since there's been a border.
Everybody makes money off of this.
Let's say you get a guy in Mexico.
He gets offered $3,000 to cross a car with a compartment.
Now he's gonna cross the border and take it over to the local Walmart, drop the car off.
Leave the keys under the mat.
He's gonna go shopping for two hours.
When he comes back, that car will be in that parking lot, but probably in a different spot.
Somebody will have picked up that car, taken it to a garage, off-loaded the 300 pounds of marijuana and brought the car back.
That young man is gonna take it back to the people that loaded him up, and they're gonna give him $3,000.
That's more than he can make in Mexico in six months of honest labor.
So what happens to the three kilos that were picked up? They will be taken to a stash house, where they will be distributed and sold on the street.
Now how do you get the money back? All kinds of ways.
Moving the drugs is easy.
Moving and laundering the money is the hard part.
As a narcotics agent, you focus a lot on the drugs, but you then quickly learn that in order to have an effective investigation, don't follow the drugs, follow the money.
You get the drugs up here and then all those drugs change hands, and American consumers pay US dollars for those drugs.
Now you've got to get the money out of the US in order to get it into the licit financial system.
Drug dealing is so enormously profitable that the amount of cash that has to move is physically If they had to do it in cash, it's huge.
Drug trafficking generates street money.
And street money, you're talking about ones, fives, tens and twenties.
The volume is just incredible.
A million dollars in $100 bills weighs 22 pounds.
In twenties is five times that.
In fives is 20 times that.
So you're talking about hundreds and hundreds of pounds of cash that you have to move.
If you go to the border, you're gonna see a huge line of vehicles on the Mexico side, trying to go north, and all these fortifications and controls checking every single vehicle.
Then you go to the other side, nobody suspects anything.
You're driving down from the US into Mexico.
They're much less vigilant about checking the vehicles.
Money crosses continuously from the US to Mexico that is a product of drug sales.
This creates a big problem for criminal groups because they can't just arrive at a bank with a truck full of drug money.
Once they manage to get all this American cash, these US dollars, down into Mexico, there are a bunch of different things they can do with them, in order to launder it.
You have ten millions of dollars.
You need to move them.
So how they do it? Through the banks.
Through the legal system.
Let's say you're a banker in Mexico, you're a mid-level banker.
I walk up to you and I go, "Listen, mister mid-level banker.
I want a business loan for $300,000.
I want to open up a bakery.
" They go, "Well, what equity do you have?" "Well, I got a million dollars in equity for my $300,000 loan.
" Well, I think we can make you this loan.
"We'll open up an account for you.
" You have a line of credit of $300,000.
But it's backed by your million-dollar deposit.
Real simple.
This seems okay.
Think a banker's gonna want to know where that money came from? Fine.
How do they prove that the one million dollars that I just took to a mid-level banker are the proceeds of controlled substance trafficking? Maybe I just found it.
Maybe I bought a used car, and it was inside of the used car.
This is also about the banking culture in Mexico.
There's an expression that you often hear in Mexico, plata o plomo "Silver or lead.
" Take the cash or take a bullet.
It's your choice.
It's not purely the case where you had bankers who were always willing to take a little kickback.
Often, the person who was walking in the door, sitting across from you, saying, "I'd like to open an account," would lay out on the desk photos of your children and tell you, "You're going to open this account.
You're going to look the other way.
" They'll get you to do it either by bribing you with silver or by killing you with lead.
Probably most of you know that HSBC has been trying to acquire a larger presence in Mexico for a number of years, and that's why we're particularly pleased the principal shareholders of Bital have decided to join with HSBC.
Bital.
Banco Bital.
Banco Bital had a great presence in Mexican territory prior to this, particularly in Sinaloa, which is an area of drug production.
Large amounts of money were coming into the bank without any form of control.
There was no monitoring.
HSBC had this system for rating how risky a banking culture was.
Standard was the very lowest.
Medium was higher than that.
Cautionary was higher than that and high was the highest.
And for Bital, HSBC repeatedly said it's standard, they said it's the lowest level.
So in spite of ample evidence that this was an environment in which you would actually want to introduce all kinds of protections, they said, "No.
This isn't something we should look at.
" There was an institutional decision not to look closely at transactions that were going on in Mexico at that time.
So when HSBC bought Bital, they bought all these bank accounts that belongs to members of the cartels.
All this illegal Mexican money that belongs to the cartels started to be everywhere.
Many of the people that used to work for these corrupt Mexican banks started to work now for these transnational banks.
HSBC had operated as sort of a group of federated fiefdoms.
You had these entities operating all over the world, that largely did their own thing.
And it was based on business.
They were looking to make money.
They had these branches that were taking in, in some cases, hundreds of thousands of dollars a day of questionable money from certain customers, and they were being exposed to tremendous risk.
In the casinos in Las Vegas, you have big spenders, high-rollers.
And these are extremely valuable customers for the casino.
In 2007, there was an unusual customer.
They referred to him as Mr.
Ye.
His name was Zhenli Ye Gon.
He was born in Shanghai, but he actually was a Mexican national.
In Mexico, they called him El Chino.
If you have a high-roller at a casino, you might get comped a room upstairs in the hotel, steak dinner at the restaurant.
Zhenli Ye Gon was comped a Rolls Royce, because he was that much of a big spender.
When the Sinaloa cartel decided to move into meth in a big way, they would send free samples in shipments of their other drugs, that people could give out to clients which would get them hooked and create this new market.
Zhenli Ye Gon ran a company in Mexico called Unimed, which was a pharmaceutical business.
One of the things that Unimed had done was import to Mexico pseudoephedrine and other ingredients that could be used as precursor chemicals for making methamphetamine.
There was a shipment of precursor chemicals and it was coming in for Zhenli Ye Gon.
So at that point, they decided to raid Mr.
Ye's home in Mexico City.
And this was this big kind of lavish, grand mansion.
And when they got in there, they found a series of firearms and, everywhere, cash.
Stacks and stacks and stacks of $100 bills.
It's piled up waist high.
205 million US dollars, and it turns out that Mr.
Ye and his company, Unimed, have been doing a lot of banking in addition to having this huge store of cash in his home, and that they've been doing this banking at HSBC.
When they had the raid on Ye Gon's house, HSBC Mexico looked into their records, found out that he was a long-time customer of theirs, that there had been a number of concerns about suspicious transactions involving his accounts.
And in fact, HSBC London, the headquarters of the bank, had ordered them to close the account back in 2004.
But guess what? They didn't close it.
One of the standard elements of any kind of compliance program at a big financial institution, they call it, "Know Your Customer.
" Know who you're dealing with.
Who is this person who's coming in here and making these deposits five times a week? We want to know who they actually are, where's the money coming from, how do we explain this.
The whole purpose of a bank is that you're supposed to know, right? That's the idea behind money laundering laws is that you're not supposed to just take in money from anywhere.
If you think it's dirty money, you have a responsibility.
That's your job.
Whether it's something like drug trafficking or extortion, or any of a litany of crimes, if these are occurring through your financial institution, you need to be capable of detecting and reporting them.
At one point, we got ahold of documents that suggested there were serious problems at HSBC.
The problems were emerging in various areas, various jurisdictions.
They weren't just popping up in one place.
And one place they were popping up was West Virginia.
I've been a prosecutor ever since I graduated from law school.
Because my grandfather and my father were both attorneys, and they both used to their legal training and their law degrees to serve the public.
So I sort of followed in their footsteps.
Before becoming US Attorney in 2010, I was an assistant prosecuting attorney in Ohio County and in Brooke County.
And then in May of 2010, I was appointed by President Obama.
After that, I served for six and a half years.
As United States Attorney, you are the chief federal law enforcement officer within your district.
Any federal crime that occurs in the Northern District of West Virginia, the US Attorney's responsible for prosecuting.
Barton Adams was a doctor in Vienna, West Virginia.
He had a business known as Interventional Pain Management.
He frequently prescribed opioids to his patients who were dealing with some kind of pain that required a Schedule II narcotic.
The suspicion was that he was committing fraud with Medicare and West Virginia Medicaid.
Not surprisingly, he also failed to report all the income that he received as a result of this scheme.
So he underreported his income, he filed false tax returns.
And then he also laundered this money.
But as they looked at the transactions linked to this fraud, they started looking at the bank involved, because they saw that there were a lot of transactions that were criminal that hadn't been detected.
And they realized a lot of these were coming from HSBC.
What the investigators found is that Dr.
Adams and his relation to HSBC was just the tip of the iceberg.
They found that the anti-money laundering program at HSBC was very lax, that it was not looking at alerts that were being generated by the system.
And it was missing not just money being laundered by a doctor in Vienna, West Virginia, but also hundreds of millions if not billions of dollars that were being moved through the bank by other criminal organizations, by drug cartels and by organizations that we believed were associated with terror financing.
In 2010, the OCC issued a 31-page very intense order, describing money laundering problems at HSBC.
It was very unusual to see such a long, detailed order like that, requiring so many changes in the bank procedures.
That letter went to HSBC to put them on notice that some suspicious activity with the bank had been uncovered and that they were going to take a closer look at HSBC.
One of the things the bank was ordered to do to fix its problems was go back and look at many transactions that had been conducted back when they weren't properly monitoring, which is a massive undertaking.
So they set up this office space in Newcastle, Delaware, and they brought in various executives, and pretty much any consultant they could find.
They needed bodies.
And one of those executives was Everett Stern.
Stern.
Four.
Mark.
Sure, I mean, um, I mean, my dream was to join the CIA and I was a candidate for the Clandestine Service, um, and that was my plan.
That was my dream.
Um, and I ended up getting rejected from that program.
And then, I saw this position online for this anti-money laundering compliance officer position, and the job was for HSBC Bank, and I never heard of HSBC Bank before.
I didn't really know what it was, but I figured anti-money laundering, that could help make a difference.
You have to understand, after the CIA rejection, I was devastated, because I My main purpose is to I wanted to serve a life with meaning, and I wanted to serve the country, um, and be a, you know, an instrument of goodness and be able to serve a higher purpose and meaning.
And that's just not what happened.
I remember, like, my first day on the job.
It wasn't like a bank building, it was a shopping center.
There were all these people in jeans and T-shirts, and I'm in this suit.
There are all these empty cubicles, the walls were half painted, and there are maybe 15 compliance officers in the whole department.
At the time, I thought they hired me 'cause I was this smart guy and I had it all going and everything.
No.
They hired me 'cause I was an idiot and didn't know what I was doing.
What I learned was that most of that one-story shopping center was a call center.
So that was where HSBC credit card people were calling to collect debts.
All these people in T-shirts and jeans and everything, those were all the debt collectors.
And these people just They didn't They had the look on them that they didn't care.
And I knew right away The minute I sat down at my cubicle, I knew I did not belong there, and I was in trouble.
It was all for show.
These anti-money laundering procedures, the bank was essentially forced to hire a certain number of people as a condition of their, "I promise we'll never do this again" settlements.
But they were phony.
And that's what Everett Stern's story is really all about.
I just sat down, and they told me to start clearing alerts, and an alert was generated when a certain rule was broken in the system.
Now, the problem HSBC had is that they had a major backlog of these alerts.
So this is why they had to hire as many people as possible.
It wasn't actually proving that the entities were legal.
It was just showing the regulators that we tried.
That was it.
But he wasn't the only person telling this story.
I had been hearing for months from these people that were working at this facility at Newcastle that they were seeing things that struck them as an inappropriate approach to going back and looking at transactions.
So OFAC has a list of companies that we can't do business with.
It's actually called the OFAC Sanctions List.
And on this list, there's Russian mobsters, terrorists, drug cartels, any bad guy you can possibly think of.
And this company called Tajco was listed on this OFAC Sanctions announcement.
So I ran through the system Tajco and Hassan Tajideen, which is the CEO of Tajco, and the Tajideen brothers are They were named as actual financiers for Hezbollah.
And I found that there were thousands and thousands in transactions that were approved and that went through the bank, and it didn't make sense because if they're on the OFAC Sanctions List, how are these wires getting through? And then I noticed they were putting little dots and dashes in the actual names in the wire filter.
For instance, if Tajco was sending money from Hezbollah to some other organization, instead of T-A-J-C-O, it would be T-A-J-dot-C-O.
Or "TAJ-CO.
" And that's how they criminally manipulated the wire filter to allow money laundering for terrorists and drug cartels.
And I realized that this was way beyond a whole bunch of idiots in cubicles trying to close alerts.
This is why three weeks in, I started passing information to the CIA.
What is clear is that HSBC's role in this conduct is not marginal, it is substantial.
HSBC London saw the whole picture and did nothing.
Good morning, everybody.
Today's hearing will examine the money-laundering, drug-trafficking, and terrorist-financing risks when a global bank uses its US affiliate to provide US dollars and access to the US financial system to a network of high risk affiliates.
Senator Levin has been on the permanent subcommittee on investigations for about 15 years.
And he's looked at money laundering conduct and misconduct by financial institutions on a number of occasions during that time period.
When we looked at HSBC, we found a lot of shocking information.
This global bank was allowing a lot of dirty money to run through the United States.
The banking giant is under investigation by the US Senate, accused of turning a blind eye to billions of dollars in money transfers.
The investigation focused on HSBC having lax control of dealings between 2006 and 2009.
And internal documents show HSBC executives knew exactly what they were doing.
"We are allowing organized criminals to launder their money.
" The Sinaloa cartel, an organization identified in the Senate report as having benefited from this money laundering, is unquestionably responsible for tens of thousands of deaths in Mexico.
The murders, the beheadings, the shootings, the kidnappings, the extortion, all of that has to do with the money.
And having the bank participate with that, they've become part of this terrorist organization.
Do you swear the testimony you'll give before this subcommittee will be the truth, the whole truth, and nothing but the truth, so help you, God? Some of the witnesses included Stuart Levey My name is Stuart Levey, I am the Chief Legal Officer of HSBC.
who had been a treasury official in the United States.
We had Irene Dorner.
Thank you, Chairman Levin and Senator Coburn.
My name is Irene Dorner and I serve as President and CEO of HSBC Bank, USA, and HSBC North America Holdings Inc.
At our hearing, HSBC did not deny the facts.
Instead, what they said is, "We're trying to do better.
" HSBC's compliance history, as examined today, is unacceptable.
HSBC has learned some very hard lessons from the experience of the past few years, but we have taken very substantial steps to address the problems that we, our regulators and this subcommittee have identified.
The problem is, they've been saying that for many years and the problems are not resolved.
You're dealing in drug money here.
You're not supposed to do that.
That's against the law.
HSBC more than once gets caught and says, "You're right, we'll be more careful in the future.
" Do you agree that given past commitments that have not been kept, that the bank has a heavy burden of proof, both as to changing behavior and as to changing the culture? It is quite clear that we've had failures in the past which we deeply regret.
And I would agree that we have some way to go to regain the trust of our regulators and of yourselves on this subcommittee.
We welcome the commitments.
We welcome the apologies.
But there is that nagging question of accountability, which others are going to have to judge.
The primary role of a US Attorney really is as a prosecutor.
You are prosecuting drug crimes, gun crimes, white collar crimes, all of the federal crimes that Congress has created.
And so the Barton Adams case, it just grew in scope very quickly.
And from 2008 until 2010, our investigators worked on it and put in thousands of hours.
Anytime a prosecutor wants to take on a bank over money laundering issues, it has to go through the Justice Department.
What's known as the Asset Forfeiture and Money Laundering Section of Justice.
This prosecutor in West Virginia, according to these documents, was prepared to indict the bank.
That would have been a huge step to take.
It would have been unprecedented.
In early September of 2010, I was told that I needed to go to Washington, D.
C.
, to meet with Lanny Breuer, who was the Assistant Attorney General in charge of the Criminal Division of the Department of Justice, and also Loretta Lynch, who at the time was the United States Attorney for the Eastern District of New York.
At the conclusion of the meeting, I received a call a few days later from Assistant Attorney General Breuer asking me to stand down.
And I told him I couldn't do that.
We had worked too long.
We had developed some really important information.
This was a case against one of the world's largest banks, and we just wanted to make sure that if there was an individual who should be held accountable, he or she was.
And that if the bank should be held accountable through a guilty plea, which might cause its charter to be pulled in the United States, that we should see it all the way through.
But he asked me to step aside.
He said that we could still continue to investigate Dr.
Adams and his wife, but that we should stand down from looking at HSBC.
Good afternoon and thank you for coming.
I remember exactly that day.
I was home in Jersey City.
I had a lot of friends who work on Wall Street.
We had been kind of waiting for the settlement to come down and most of us expected that it would be pretty rough.
We are here today to announce the filing of criminal charges against HSBC Bank, both its US entity, HSBC US, and the parent HSBC Group, for its sustained and systemic failure to guard against the corruption of our financial system by drug traffickers and other criminals and for evading US sanctions law.
And HSBC was the one we were all looking at, saying, "That's the one where they have to go to trial.
They have to take these people and they have to put somebody away for it.
" Because HSBC was something that you could understand in one sentence.
Rich bankers laundering $800 million dollars for evil drug gangs and narco terrorists who chop people's heads off.
HSBC is being held accountable for stunning, stunning failures of oversight and worse.
Even prosecutors that I was talking to at the time, law enforcement sources, they thought that if ever there was a time you indict a bank for money laundering, this is it.
HSBC has admitted its guilt to the four-count information filed today, which sets forth two violations of the Bank Secrecy Act, a violation of the International Emergency Economic Powers Act, or IEPA, and a violation of the Trading with the Enemy Act.
As part of its resolution of these charges, HSBC has agreed to forfeit $1.
256 billion.
They have also agreed to pay civil penalties of $665 million.
A deal was worked out.
They paid a fine of $1.
9 billion.
That's five weeks' profit for HSBC.
We thought, I guess naively, that this was gonna be different.
But it wasn't different.
It was exactly the same.
What we ended up with was a deferred prosecution agreement.
A deferred prosecution agreement with HSBC, in effect meaning there will be no prosecution of the bank or its top executives, despite more than a decade of dealing with criminals and terrorists.
HSBC has engaged and agreed to partially defer bonus compensation for its most senior executives A portion of the bonuses of some of the senior executives was withheld.
Just a portion.
They have agreed to a five-year term under this deferred prosecution agreement, with a corporate monitor and a requirement of ongoing cooperation.
This was not your typical Northern West Virginia press conference.
It was in Brooklyn.
You had reporters from major networks that attended because of the scope of the case.
And there were some good questions.
In London, analysts are saying the bank can easily absorb this cost.
They made profits of $38 billion the last two years.
- Is it really that significant? - Well, I think Are we really holding the bank accountable? Look, our goal here is not to bring HSBC down.
It's not to cause a systemic effect on the economy.
It's not for people to lose thousands of jobs.
It's to-- They don't deserve that? Ultimately, no individual was charged with any crimes, and no individual was fined any amount of money.
Here's this big bank, that was essentially let off the hook.
It was fined, but it's a speeding ticket.
If the Sinaloa cartel had agreed to not do any more drug smuggling, would you also defer prosecution in their case? Well, I think that's a little bit of hyperbole.
Look, my When you look at this, one of the things we also have to think about, frankly, is who are the innocent people here? The connection between a bank who was by its own admission the preferred financial institution of the drug cartels, the most brutal organizations on Earth, okay? That connection between doing that conduct and the over 100,000 massacred in Mexico really has to be made.
We found it hard to believe, as an investigative team, that upper-level management was unaware of what was happening.
It was our theory that the bank knew what was happening, that it was good for business, that it was good for the bottom line, but that it didn't want it to cease, because that would then affect its profit margins.
Eric Holder was the Attorney General at the time.
And what we found out is that the regulator in the United Kingdom really pressed the case and said, "Please don't indict HSBC because it's going to have a huge financial impact.
" Eric Holder bought that argument.
You think about it, who's doing the regulation, who's making these cases? You think about Eric Holder and Lanny Breuer, again they both came from the same big law firm, Covington and Burling in Washington which represented almost all the too-big-to-fail banks.
They know that when they leave, the instant they go back to the private sector, they're going to get a partnership worth three, four, five million dollars a year.
But if you're too rough on your clientele, that partnership might not be there.
So there's a powerful incentive for you to behave a certain way towards the people you're regulating.
The Justice Department went to OCC, and they asked, "What's gonna happen? Can we do this?" You know, I think they wanted cover, so that if they do this, and there's a calamity, it's not on them.
But nobody was willing to give them comfort with doing that.
And I think, you know, Lanny Breuer, the head of the criminal division, had to make a choice.
Because we had a financial crisis we were still climbing out of in this country.
And frankly, nobody knew what would be the consequence if you do this, if you indict.
When the HSBC settlement came down, there were editorials in financial newspapers that said, "This looks bad for everybody.
" And that was a major signal that it was a soft-touch settlement that even the financial press thought it was a giveaway.
You'll likely go to jail if you're caught with an ounce of cocaine.
If it happens repeatedly, you may go to jail for the rest of your life.
But evidently, if you launder nearly a billion dollars for drug cartels and violate our international sanctions, your company pays a fine and you go home and sleep in your own bed at night.
Every single individual associated with this.
I think that's fundamentally wrong.
That's not equal justice under law.
That is not accountability.
You don't think the bank got off easy? No, and I don't think the bank thinks it got off easy.
I really don't.
I don't think the bank got off easy, no.
A part of the deferred prosecution agreement process is there's going to be some sort of admission by the company that they've done something wrong.
You have to understand, those are admissions that come out after an army of lawyers for HSBC negotiate as hard as they can with the Department to get the language as watered down as they can.
I know from experience that's the process.
Yeah, I think this one.
Go ahead with the first one.
I'll hold it up more.
"The following statement of facts is incorporated by reference as part of the deferred prosecution agreement.
" "HSBC Bank USA and HSBC Holdings hereby agree and stipulate that the following information is true and accurate.
" "HSBC Bank USA and HSBC Holdings accept" "that they are responsible for the acts of their respective officers, directors, employees and agents as set forth in this prosecution agreement.
" "If this matter were to proceed to trial, the department would prove beyond a reasonable doubt by admissible evidence the facts alleged below and set forth in the criminal information attached to this agreement.
" "From 2006 to 2010, HSBC Bank USA violated the BSA and its implementing regulations.
" "Specifically, HSBC Bank USA ignored the money laundering risks associated with doing business with certain Mexican customers and failed to implement a BSA/AML program that was adequate to monitor suspicious transactions.
" "As a result of these concurrent AML failures, at least $881 million in drug trafficking proceeds" "including proceeds of drug trafficking by the Sinaloa cartel in Mexico, and the Norte del Valle cartel in Colombia" "were laundered through HSBC Bank USA without being detected.
" "From at least 2000 to 2006, HSBC group knowingly and willfully engaged in conduct and practices outside the United States that caused HSBC Bank and other financial institutions located in the United States to process payments in violation of US sanctions.
To hide these transactions, HSBC Group affiliates altered and routed payment messages in a manner that ensured that payments involving sanctioned countries and entities cleared without difficulty through HSBC Bank, USA, in New York County and elsewhere.
" See, they admitted to everything.
It's incredible.
It's, um It's an admission.
It's shocking for me to read that.
Yeah.
How does it make you feel? We talked at the beginning about the fact that here in West Virginia, we've got We might be at the epicenter of the drug problem in the entire country.
We lead the nation in drug overdose deaths on a per capita basis.
And so to hear that there's a bank that is enabling the Sinaloa drug cartel to move money around so it could continue to operate, and continue to push heroin from Mexico to Appalachia, to northern West Virginia, makes it all the more upsetting, because the government had an opportunity to do a better job of addressing this conduct, and it failed.
This conclusion of the US government for me is just another proof that all this war against drug cartels is just fake.
It's not real.
Because if really they want to fight against them, they have to fight against the banks that help them to move the money.
Was justice done here? That's a hard question to answer.
We would never allow this kind of thing if it was a different kind of person.
But because they're white people who drive nice cars and live in Connecticut or whatever it is, they get off.
That's the reality.
It's a completely different process.
You wouldn't arrest a drug dealer and then go into a back room and craft a settlement that allowed the person to retain his home, his family, his lifestyle, his cars, all those things.
But that's what they did with this case.
And it formalized what everybody already knew, which was that when these companies become so systemically important that prosecuting even the individuals in them threatens to disrupt the world economy, then they're too big to jail.
They're a member of a class that is not jailable.