DEA NEWS: HSBC HOLDINGS PLC. AND HSBC BANK USA N.A. ADMIT TO ANTI-MONEY LAUNDERING AND SANCTIONS VIOLATIONS, FORFEIT $1.256 BILLION IN DEFERRED PROSECUTION AGREEMENT BUT AGREEMENT NOT ACCEPTED OMNIBUS PUBLIC SAFETY

DEFERRED PROSECUTION AGREEMENT BUT AGREEMENT NOT ACCEPTED OMNIBUS PUBLIC SAFETY

---------- Forwarded message ----------
From: guy perea <guyperea@rocketmail.com>
Date: Tue, 11 Dec 2012 12:12:21 -0800 (PST)
Subject: DEA NEWS: HSBC HOLDINGS PLC. AND HSBC BANK USA N.A. ADMIT TO
ANTI-MONEY LAUNDERING AND SANCTIONS VIOLATIONS, FORFEIT $1.256 BILLION
IN DEFERRED PROSECUTION AGREEMENT BUT AGREEMENT NOT ACCEPTED OMNIBUS
PUBLIC SAFETY
To: guyperea1@gmail.com





----Forwarded Message----
From: guyperea@rocketmail.com
To: guyperea.columbia@blogger.com
Sent: Tue, Dec 11, 2012 11:58 AM PST
Subject: DEA NEWS: HSBC HOLDINGS PLC. AND HSBC BANK USA N.A. ADMIT TO
ANTI-MONEY LAUNDERING AND SANCTIONS VIOLATIONS, FORFEIT $1.256 BILLION
IN DEFERRED PROSECUTION AGREEMENT BUT AGREEMENT NOT ACCEPTED OMNIBUS
PUBLIC SAFETY





----Forwarded Message----
From: dea@govdelivery.com
To: guyperea@rocketmail.com
Sent: Tue, Dec 11, 2012 10:00 AM PST
Subject: DEA NEWS: HSBC HOLDINGS PLC. AND HSBC BANK USA N.A. ADMIT TO
ANTI-MONEY LAUNDERING AND SANCTIONS VIOLATIONS, FORFEIT $1.256 BILLION
IN DEFERRED PROSECUTION AGREEMENT

banner

**

*  FOR IMMEDIATE RELEASE
*

*  Contact: DEA Public Affairs
*

*  (202) 307-7977*

*
*

Press Release


*DEA NEWS: HSBC HOLDINGS PLC. AND HSBC BANK USA N.A. ADMIT TO
ANTI-MONEY LAUNDERING AND SANCTIONS VIOLATIONS, FORFEIT $1.256 BILLION
IN DEFERRED PROSECUTION AGREEMENT*

* * WASHINGTON – DEA and other federal officials announced today that
HSBC Holdings plc (HSBC Group) – a United Kingdom corporation
headquartered in London – and HSBC Bank USA N.A. (HSBC Bank USA)
(together, HSBC) – a federally chartered banking corporation
headquartered in McLean, Va. – have agreed to forfeit $1.256 billion
and enter into a deferred prosecution agreement with the Justice
Department for HSBC's violations of the Bank Secrecy Act (BSA), the
International Emergency Economic Powers Act (IEEPA) and the Trading
with the Enemy Act (TWEA).  According to court documents, HSBC Bank
USA violated the BSA by failing to maintain an effective anti-money
laundering program and to conduct appropriate due diligence on its
foreign correspondent account holders.  The HSBC Group violated IEEPA
and TWEA by illegally conducting transactions on behalf of customers
in Cuba, Iran, Libya, Sudan and Burma – all countries that were
subject to
sanctions enforced by the Office of Foreign Assets Control (OFAC) at
the time of the transactions.



            The announcement was made by Lanny A. Breuer, Assistant
Attorney General of the Justice Department's Criminal Division;
Loretta Lynch, U.S. Attorney for the Eastern District of New York; and
John Morton, Director of U.S. Immigration and Customs Enforcement
(ICE); DEA Special Agent in Charge Brian Crowell, along with numerous
other law enforcement and regulatory partners.  The New York County
District Attorney's Office worked with the Justice Department on the
sanctions portion of the investigation.  Treasury Undersecretary David
S. Cohen and Comptroller of the Currency Thomas J. Curry also joined
in today's announcement.



            A four-count felony criminal information was filed today
in federal court in the Eastern District of New York charging HSBC
with willfully failing to maintain an effective anti-money laundering
(AML) program, willfully failing to conduct due diligence on its
foreign correspondent affiliates, violating IEEPA and violating TWEA.
HSBC has waived federal indictment, agreed to the filing of the
information, and has accepted responsibility for its criminal conduct
and that of its employees.



            "HSBC is being held accountable for stunning failures of
oversight – and worse – that led the bank to permit narcotics
traffickers and others to launder hundreds of millions of dollars
through HSBC subsidiaries, and to facilitate hundreds of millions more
in transactions with sanctioned countries," said Assistant Attorney
General Breuer.  "The record of dysfunction that prevailed at HSBC for
many years was astonishing.  Today, HSBC is paying a heavy price for
its conduct, and, under the terms of today's agreement, if the bank
fails to comply with the agreement in any way, we reserve the right to
fully prosecute it."

* *

           "Today we announce the filing of criminal charges against
HSBC, one of the largest financial institutions in the world," said
U.S. Attorney Lynch.  "HSBC's blatant failure to implement proper
anti-money laundering controls facilitated the laundering of at least
$881 million in drug proceeds through the U.S. financial system.
HSBC's willful flouting of U.S. sanctions laws and regulations
resulted in the processing of hundreds of millions of dollars in
OFAC-prohibited transactions.  Today's historic agreement, which
imposes the largest penalty in any BSA prosecution to date, makes it
clear that all corporate citizens, no matter how large, must be held
accountable for their actions."



            "Cartels and criminal organization are fueled by money and
profits," said ICE Director Morton.  "Without their illicit proceeds
used to fund criminal activities, the lifeblood of their operations is
disrupted.  Thanks to the work of Homeland Security Investigations and
our El Dorado Task Force, this financial institution is being held
accountable for turning a blind eye to money laundering that was
occurring right before their very eyes.  HSI will continue to
aggressively target financial institutions whose inactions are
contributing in no small way to the devastation wrought by the
international drug trade.  There will be also a high price to pay for
enabling dangerous criminal enterprises."

* *

            In addition to forfeiting $1.256 billion as part of its
deferred prosecution agreement (DPA) with the Department of Justice,
HSBC has also agreed to pay $665 million in civil penalties – $500
million to the Office of the Comptroller of the Currency (OCC) and
$165 million to the Federal Reserve – for its AML program violations.
The OCC penalty also satisfies a $500 million civil penalty of the
Financial Crimes Enforcement Network (FinCEN).  The bank's $375
million settlement agreement with OFAC is satisfied by the forfeiture
to the Department of Justice.  The United Kingdom's Financial Services
Authority (FSA) is pursuing a separate action.



            As required by the DPA, HSBC also has committed to
undertake enhanced AML and other compliance obligations and structural
changes within its entire global operations to prevent a repeat of the
conduct that led to this prosecution.  HSBC has replaced almost all of
its senior management, "clawed back" deferred compensation bonuses
given to its most senior AML and compliance officers, and has agreed
to partially defer bonus compensation for its most senior executives –
its group general managers and group managing directors – during the
period of the five-year DPA.  In addition to these measures, HSBC has
made significant changes in its management structure and AML
compliance functions that increase the accountability of its most
senior executives for AML compliance failures.



*The AML Investigation*



            According to court documents, from 2006 to 2010, HSBC Bank
USA severely understaffed its AML compliance function and failed to
implement an anti-money laundering program capable of adequately
monitoring suspicious transactions and activities from HSBC Group
Affilliates, particularly HSBC Mexico, one of HSBC Bank USA's largest
Mexican customers.  This included a failure to monitor billions of
dollars in purchases of physical U.S. dollars, or "banknotes," from
these affiliates.  Despite evidence of serious money laundering risks
associated with doing business in Mexico, from at least 2006 to 2009,
HSBC Bank USA rated Mexico as "standard" risk, its lowest AML risk
category.  As a result, HSBC Bank USA failed to monitor over $670
billion in wire transfers and over $9.4 billion in purchases of
physical U.S. dollars from HSBC Mexico during this period, when HSBC
Mexico's own lax AML controls caused it to be the preferred
financial institution for drug cartels and money launderers.



A significant portion of the laundered drug trafficking proceeds were
involved in the Black Market Peso Exchange (BMPE), a complex money
laundering system that is designed to move the proceeds from the sale
of illegal drugs in the United States to drug cartels outside of the
United States, often in Colombia.  According to court documents,
beginning in 2008, an investigation conducted by ICE Homeland Security
Investigation's (HSI's) El Dorado Task Force, in conjunction with the
U.S. Attorney's Office for the Eastern District of New York,
identified multiple HSBC Mexico accounts associated with BMPE activity
and revealed that drug traffickers were depositing hundreds of
thousands of dollars in bulk U.S. currency each day into HSBC Mexico
accounts.  Since 2009, the investigation has resulted in the arrest,
extradition, and conviction of numerous individuals illegally using
HSBC Mexico accounts in furtherance of BMPE activity.



As a result of HSBC Bank USA's 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.  HSBC Group admitted
it did not inform HSBC Bank USA of significant AML deficiencies at
HSBC Mexico, despite knowing of these problems and their effect on the
potential flow of illicit funds through HSBC Bank USA.



*The Sanctions Investigation*



            According to court documents, from the mid-1990s through
September 2006, HSBC Group allowed approximately $660 million in
OFAC-prohibited transactions to be processed through U.S. financial
institutions, including HSBC Bank USA.  HSBC Group followed
instructions from sanctioned entities such as Iran, Cuba, Sudan, Libya
and Burma, to omit their names from U.S. dollar payment messages sent
to HSBC Bank USA and other financial institutions located in the
United States.  The bank also removed information identifying the
countries from U.S. dollar payment messages; deliberately used
less-transparent payment messages, known as cover payments; and worked
with at least one sanctioned entity to format payment messages, which
prevented the bank's filters from blocking prohibited payments.



            Specifically, beginning in the 1990s, HSBC Group
affiliates worked with sanctioned entities to insert cautionary notes
in payment messages including "care sanctioned country," "do not
mention our name in NY," or "do not mention Iran."  HSBC Group became
aware of this improper practice in 2000.  In 2003, HSBC Group's head
of compliance acknowledged that amending payment messages "could
provide the basis for an action against [HSBC] Group for breach of
sanctions."  Notwithstanding instructions from HSBC Group Compliance
to terminate this practice, HSBC Group affiliates were permitted to
engage in the practice for an additional three years through the
granting of dispensations to HSBC Group policy.



            Court documents show that as early as July 2001, HSBC Bank
USA's chief compliance officer confronted HSBC Group's Head of
Compliance on the issue of amending payments and was assured that
"Group Compliance would not support blatant attempts to avoid
sanctions, or actions which would place [HSBC Bank USA] in a
potentially compromising position."  As early as July 2001, HSBC Bank
USA told HSBC Group's head of compliance that it was concerned that
the use of cover payments prevented HSBC Bank USA from confirming
whether the underlying transactions met OFAC requirements.  From 2001
through 2006, HSBC Bank USA repeatedly told senior compliance officers
at HSBC Group that it would not be able to properly screen sanctioned
entity payments if payments were being sent using the cover method.
These protests were ignored.



            "Today HSBC is being held accountable for illegal
transactions made through the U.S. financial system on behalf of
entities subject to U.S. economic sanctions," said Debra Smith, Acting
Assistant Director in Charge of the FBI's Washington Field Office.
"The FBI works closely with partner law enforcement agencies and
federal regulators to ensure compliance with federal banking laws to
promote integrity across financial institutions worldwide."

* *

*            *"Banks are the first layer of defense against money
launderers and other criminal enterprises who choose to utilize our
nation's financial institutions to further their criminal activity,"
said Richard Weber, Chief, Internal Revenue Service-Criminal
Investigation (IRS-CI).  "When a bank disregards the Bank Secrecy
Act's reporting requirements, it compromises that layer of defense,
making it more difficult to identify, detect and deter criminal
activity.  In this case, HSBC became a conduit to money laundering.
The IRS is proud to partner with the other law enforcement agencies
and share its world-renowned financial investigative expertise in this
and other complex financial investigations."



            Manhattan District Attorney Cyrus R. Vance Jr., said, "New
York is a center of international finance, and those who use our banks
as a vehicle for international crime will not be tolerated.  My office
has entered into Deferred Prosecution Agreements with two different
banks in just the past two days, and with six banks over the past four
years.  Sanctions enforcement is of vital importance to our national
security and the integrity of our financial system. The fight against
money laundering and terror financing requires global cooperation, and
our joint investigations in this and other related cases highlight the
importance of coordination in the enforcement of U.S. sanctions. I
thank our federal counterparts for their ongoing partnership."



            Queens County District Attorney Richard A. Brown said, "No
corporate entity should ever think itself too large to escape the
consequences of assisting international drug cartels.  In particular,
banks have a special responsibility to use appropriate due diligence
in monitoring the cash transactions flowing through their financial
system and identifying the sources of that money in order not to
assist in criminal activity.  By allowing such illicit transactions to
occur, HSBC failed in its global responsibility to us all.  Hopefully,
as a result of this historical settlement, we have gained the
attention of not only HSBC but that of every other major financial
institution so that they cannot turn a blind eye to the crime of money
laundering."



**  *  **



This case was prosecuted by Money Laundering and Bank Integrity Unit
Trial Attorneys Joseph Markel and Craig Timm of the Criminal
Division's Asset Forfeiture and Money Laundering Section, and
Assistant U.S. Attorneys Alex Solomon and Daniel Silver of the U.S.
Attorney's Office for the Eastern District of New York.



            The AML investigation was conducted by HSI's El Dorado
Task Force, a joint task force composed of members from more than 55
law enforcement agencies in New York and New Jersey, including special
agents and investigators from IRS-CI and the Queens County District
Attorney's Office, other federal agents, state and local police
investigators and intelligence analysts, with the assistance of DEA's
New York Division.  The sanctions investigation was conducted by the
FBI's Washington Field Office.



            The Money Laundering and Bank Integrity Unit is a corps of
prosecutors with a boutique practice aimed at hardening the financial
system against criminal money laundering vulnerabilities by
investigating and prosecuting financial institutions and professional
money launderers for violations of the anti-money laundering statutes,
the Bank Secrecy Act and other related statutes.



            The Department of Justice expressed gratitude to William
Ihlenfeld II, U.S. Attorney for the Northern District of West
Virginia; Assistant District Attorney Garrett Lynch of the New York
County District Attorney's Office, Major Economic Crimes Bureau; the
Treasury Department's Office of Foreign Assets Control; the Board of
Governors of the Federal Reserve System; and the Office of the
Comptroller of the Currency for their significant and valuable
assistance.

###



________________________________________________________________________

You have received this e-mail because you have asked to be notified of
changes to the U.S. Department of Justice Web site.


--
President of The United States
Guy Ralph Perea Sr President of The United States
Weatherdata1046am0426 a Discussion Group of
Weatherdata<http://groups.google.com/group/weatherdata1046am0426>
USFMSC
http://www.cityfreq.com/ca/avalon/>
QUALIFY QICP
OCCUPS
http://www.occupationalinfo.org/02/025062010.html
goldlandabstracts; link check
own search engine - The United
States International Policies
http://apps.facebook.com/faceblogged/?uid=1340855784
http://lnk.ms/8d5gl aol
http://groups.google.com/group/united-states-of-american
http://cmt1.blogspot.com
http://twitter.com/guyperea
http://twitter.com/ptusss Federal Communication
Commission<http://columbiabroadcast.spaces.live.com/>

Ambassador Chevy Chase; Kevin Corcran; Jack Nickolas; Cher; Shirley Temple
Black; Liza Minnille; Ansari; Ernest Tascoe; Food, Drug and Cosmetic Act
Agent Jodie Foster; Department of Veterans Affairs Director George H.W. Bush
Title 22 USCS section 1928 (b) The e-mail
transmission may contain legally privileged information that
is intended only for the individual or entity recipient, you are hereby,
notified that any disclosure, copying, distribution, or reliance upon the
contents of this E-mail is strictly prohibited. If you have received this
E-mail transmission in error, please reply to the sender, so arrangements
can be made for proper delivery. Title 42
USCS section 192 etseq Margie Paxton Chief of Childrens Bureau
Director of The United States Department of Human Services; Defendant
Article IV General Provisions Section 2
(Supreme Law of The Land) The Constitution of The United States "Any thing
in The Constitution or Laws of any State to the Contrary Notwithstanding"
Contrary to Law (of an act or omission) illegal;
https://plus.google.com/100487463984952448443
https://twitter.com/presidentus1