Respectfully submitted by Lawrence E. Rafferty, (rafflaw) Weekend Contributor
British banking giant, HSBC reached an agreement in 2012 with the Department of Justice that kept it from being hauled in to court on criminal charges due to its systemic assistance in laundering money for drug cartels and allegedly terrorists. HSBC, with its Hong Kong headquarters shown above, is now in trouble again for alleged problems prior to the settlement agreement in 2012.
“The US Department of Justice is considering bringing criminal charges against HSBC and its executives as part of its investigation into whether the bank’s Swiss subsidiary helped US clients evade taxes.
Democratic senator Elizabeth Warren called on prosecutors to “come down hard” on HSBC if the bank is found to have colluded with tax evaders on Tuesday.
Her intervention came as US government officials with knowledge of the DoJ’s investigation provided the Guardian with new details about the inquiry.
Renewed focus has been placed on the long-running investigation into HSBC Switzerland by the department, after a huge leak of secret bank data – passed to the DOJ’s tax division almost five years ago – was obtained by the Guardian and other media.
It shows that HSBC Switzerland helped some clients conceal millions of undeclared assets, and has immediately raised questions on Capitol Hill about the response from prosecutors and tax authorities. US government officials said the investigation is not merely looking at HSBC’s US clients, and could also result in criminal indictments against the bank itself. “That has not been ruled out,” one official said, when asked if HSBC or its executives could be criminally indicted. “It is certainly something that is under consideration.” ‘ Reader Supported News
This latest disclosure of an alleged enterprise to assist wealthy customers and corporations to evade taxes in the United States and internationally was disclosed by an international whistleblower named Hervé Falciani. Mr. Falciani turned over the data to French authorities in 2010. The French shared the information with the United States that same year and we have just recently learned of the pending investigation into the matter. Not only is the alleged illegal activity disturbing, but the fact that the Department of Justice has had this information for at least 4 years is even more distressing.
Did the Department of Justice consider this information before it agreed to the 2012 settlement agreement with HSBC which allowed HSBC to escape criminal prosecution? I am surprised that Loretta Lynch was not asked that question when she was grilled by the Senate committee discussing her confirmation as United States Attorney General. In light of how easy the Department of Justice went on HSBC in 2012, maybe I should not be surprised.
“That nobody from the bank went to jail or paid a dollar in individual fines is nothing new in this era of financial crisis. What is different about this settlement is that the Justice Department, for the first time, admitted why it decided to go soft on this particular kind of criminal. It was worried that anything more than a wrist slap for HSBC might undermine the world economy. “Had the U.S. authorities decided to press criminal charges,” said Assistant Attorney General Lanny Breuer at a press conference to announce the settlement, “HSBC would almost certainly have lost its banking license in the U.S., the future of the institution would have been under threat and the entire banking system would have been destabilized.”
It was the dawn of a new era. In the years just after 9/11, even being breathed on by a suspected terrorist could land you in extralegal detention for the rest of your life. But now, when you’re Too Big to Jail, you can cop to laundering terrorist cash and violating the Trading With the Enemy Act, and not only will you not be prosecuted for it, but the government will go out of its way to make sure you won’t lose your license. Some on the Hill put it to me this way: OK, fine, no jail time, but they can’t even pull their charter? Are you kidding?
But the Justice Department wasn’t finished handing out Christmas goodies. A little over a week later, Breuer was back in front of the press, giving a cushy deal to another huge international firm, the Swiss bank UBS, which had just admitted to a key role in perhaps the biggest antitrust/price-fixing case in history, the so-called LIBOR scandal, a massive interest-raterigging conspiracy involving hundreds of trillions (“trillions,” with a “t”) of dollars in financial products. While two minor players did face charges, Breuer and the Justice Department worried aloud about global stability as they explained why no criminal charges were being filed against the parent company.
“Our goal here,” Breuer said, “is not to destroy a major financial institution.”‘ Rolling Stone
You will recall that infamous concept that the Big Banks are too big to jail. HSBC has taken that knowledge and for years has been doing its best to avoid and elude regulators over its now infamous schemes to hide drug cartels and terrorist money from American and international authorities.
We have an international bank doing substantial business in the United States and they are found to have intentionally hidden assets on more than one occasion, and the Department of Justice is just getting around to consider criminal prosecutions!
I have an idea. If a bank or any corporation has been found to have seriously violated the law on multiple occasions, maybe, just maybe it might make sense to close them down and put the individuals responsible for making the conscious decision to hide assets, in jail. Would other banks and corporations so readily violate our laws if some people are going to jail and some corporate charters are being pulled?
Without sincere efforts by a Department of Justice that is truly blind to size and wealth, can we ever expect these banking criminals to change their behavior? Just because they are corporations, they are just people like you and I, aren’t they?
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