HSBC Judge Requests Reasons to Approve Drug-Money Accord
HSBC Holdings Plc (HSBA) and U.S. prosecutors were asked by a judge to submit a brief giving reasons he should approve the bank’s $1.9 billion settlement of money-laundering charges over drug cartel-related transfers.
“My suggestion is you present to the court a document that demonstrates why I should accept the agreement,” U.S. District Judge John Gleeson said today at a court hearing in Brooklyn, New York. “There’s been some publicized criticism of this. I think you should feel free to address it.”
The U.S. Justice Department said this month that the London-based bank agreed to pay a $1.25 billion forfeiture and $665 million in civil penalties to settle money-laundering charges. The government alleged the London-based bank failed to monitor more than $670 billion in wire transfers and more than $9.4 billion in purchases of U.S. dollars from HSBC Mexico.
Lack of oversight enabled the Sinaloa drug cartel in Mexico and the Norte del Valle Cartel in Colombia to move more than $881 million in proceeds through HSBC’s U.S. unit from 2006 to 2010, according to the government.
The bank, Europe’s largest, wouldn’t face further criminal proceedings related to the probe under a deferred-prosecution agreement, in which the government allows a target to avoid charges by meeting certain conditions.
The case is U.S. v. HSBC Bank USA NA, 1:12-cr-00763, U.S. District Court, Eastern District of New York (Brooklyn).
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