2012-12-12 / Front Page

Federal Officials Praise Queens DA's Office In Cracking $1.9 Billion HSBC Laundering Case

U.S. government officials – including Lanny A. Breuer, Assistant Attorney General of the Justice Department’s Criminal Division and Loretta Lynch, U.S. Attorney for the Eastern District of New York
– praised Queens District Attorney Richard A. Brown and his office for their significant role in helping
to develop the case against HSBC, which has admitted to money laundering and sanctions violations and
agreed to forfeit $1.256 billion as part of a deferred prosecution agreement and pay an additional $665
million in civil penalties for its anti-money laundering program violations.
During a press conference yesterday, U.S. Department of Justice officials noted that the anti-money
laundering investigation was conducted by Homeland Security Investigations’ 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 investigators from the Queens County District Attorney’s Office – with the assistance
of the Drug Enforcement Administration’s New York Division.
In his remarks, John Morton, the Director of U.S. Immigration and Customs Enforcement (ICE),
recognized District Attorney Brown and his office for their assistance and gave a special thanks to
Homeland Security Investigations Group Supervisor and Queens County District Attorney Lieutenant
Frank DiGregorio who co-led the El Dorado investigation, which discovered that HSBC Bank USA
violated the Bank Secrecy Act and its implementing regulations by failing to maintain an effective antimoney
laundering program and to conduct appropriate due diligence on its foreign correspondent account
holders. As a result, hundreds of millions of dollars in drug trafficking proceeds that helped fund cartels
in Mexico and Colombia were laundered through HSBC – even though HSBC was aware of the significant
anti-money laundering problems in its financial institution and allowed them to continue.
The HSBC Group violated the International Emergency Economic Powers Act and the Trading with
the Enemy Act 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 at
the time of the transactions.
District Attorney Brown said of the settlement, “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 that they cannot turn a blind eye to the crime of money laundering.”
Note to Editors: E-version of this press release is posted at www.queensda.org

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