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HSBC Laundered Billions in Drug Cartel Money

European mega-bank admits to doing business with Mexican drug cartels through its US branches.

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Home to some shady money. Photo via

By McCarton Ackerman

07/17/12

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Europe's biggest bank, HSBC, has managed to play a direct role in the Mexican drug war. The bank allowed drug cartels to launder billions of dollars through its US operations for seven years, from 2002-2009, according to the findings of an investigation from the Senate Permanent Subcommittee on Investigations. "Money laundering" involves taking profits from the trafficking of drugs, arms or other illicit activities and passing them through bank accounts to disguise the illegal activity. And Mexican drug crime organizations were not the only group to take advantage of HSBC's open door policy. A number of the bank's affiliates ignored US government bans against financial transactions with Iran and provided money and banking services to some banks in Saudi Arabia and Bangladesh that have directly funded Al Qaeda and other terrorist groups. "In an age of international terrorism, drug violence in our streets and on our borders, and organized crime, stopping illicit money flows that support those atrocities is a national security imperative," says Sen. Carl Levin, the subcommittee's chairman. HSBC released a statement promising to own up to their mistakes at a panel hearing today and offer a formal apology: "We will apologize, acknowledge these mistakes, answer for our actions and give our absolute commitment to fixing what went wrong. We..recognize that our controls could and should have been stronger and more effective in order to spot and deal with unacceptable behavior." HSBC also claims to have completely changed its senior management last year and made other changes to prevent future money laundering.

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