Murderous Mexican drug cartels, financiers of terrorist organisations, tax exiles with Cayman Island bank accounts, and suspicious Russians who claimed to be in the used car business – all of them used HSBC to launder money through the United States, according to a damning Congressional report out today.
Executives from the British bank face a roasting in front of a Senate panel after a months-long investigation into lapses across the company over the last decade, when huge imports of US banknotes from Mexico and suspicious quantities of travellers cheques failed to raise the red flags they ought to have.
Details of the report emerged last night, on the same day another Congressional panel said it would launch an investigation of Barclays into the Libor rate-rigging scandal, threatening to drag another British bank before US lawmakers.
HSBC's money laundering transgressions have already been the subject of a probe by the Department of Justice, which could file US charges soon and impose hundreds of millions of dollars in fines.
But the extent of the lapses are being laid bare publicly for the first time in the report by the Senate Homeland Security Committee's permanent sub-committee on investigations this morning. It found the British bank:
• Actively circumvented US safeguards designed to block transactions involving terrorists and rogue regimes, including one case where two HSBC subsidiaries sent nearly 25,000 transactions involving $19.4bn through their US accounts over seven years without disclosing the transactions' links to Iran;
• Provided US dollars and banking services to banks in Saudi Arabia and Bangladesh despite links to terrorist financing; and
• Cleared $290m in "obviously suspicious" US travellers cheques for a Japanese bank, benefiting Russians who claimed to be in the used car business.
And in some of the most serious accusations, HSBC is said to have been used by Mexican drug gangs to launder money through the US, using the bank's Mexican subsidiary's links to "casas de cambio", the money-changing businesses used to send money abroad.
HSBC said last night that will apologise, acknowledge mistakes, answer for its actions and give an absolute commitment to fixing what went wrong.
The extent of the money laundering is being made public for the first time in the report