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HSBC is not unique in this especially profitable form of money
laundering. As the Party for Socialism and Liberation pamphlet “The
Myth of Democracy and the Rule of the Banks” documents, Wachovia
Bank laundered $378 billion in Mexican drug cartel proceeds between
2004-07.
In a 2010 settlement, Wells-Fargo, which had taken over Wachovia in
2008, agreed to a settlement of $160 million with the government. And, as
in the HSBC case, there were no criminal prosecutions of Wachovia
executives.
“Martin Woods, the director of Wachovia’s anti-money laundering
unit quit the bank after Wachovia executives repeatedly ignored his
documentation of drug dealers laundering funds through the bank. Woods
told Bloomberg: ‘It’s the banks laundering money for the cartels that
finances the tragedy [in Mexico.’” (The Myth of Democracy and the Rule
of the Bank, p. 17)
Large-scale drug trafficking is impossible without the kind of largescale
money laundering that only the big banks can facilitate. In the
Wachovia case: “The cartels used laundered money funneled through a
‘legitimate’ bank to buy large planes for the transport of hundreds of
millions of dollars worth of cocaine.”
The DOJ charged that the Sinaloa cartel of Mexico and the Norte del
Valle cartel from Colombia laundered $881 million through HSBC’s U.S.
affiliate. But that’s just the start.
The Mexican affiliate of HSBC “transported $7 billion in physical
U.S. dollars to HBUS [HSBC’s U.S. affiliate] from 2007 to 2008,
outstripping other Mexican banks, even one twice its size.” (Majority
Media report on Senate hearing, July 16, 2012)
In order to facilitate much larger drug money laundering, HSBC
ranked Mexico as having “standard” risk, the lowest of four categories,
and between 2006-2009 assigned only one or two compliance officers. In
2007 it froze staffing in its anti-money laundering department to “cut costs
and increase the bank’s return on equity.” (Market Watch, Dec. 11, 2012)
The ranking and lack of staffing allowed unmonitored wire transfers
from Mexico of $670 billion between 2006 and 2009 alone.