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Whistleblower: HSBC Still Laundering Money for Terrorists, Drug Cartels

Whistleblower: HSBC Still Laundering Money for Terrorists, Drug Cartels 1

Big banks are apparently too big to jail, even when they bankroll terrorists and drug cartels, while regular people fill the prisons in the world’s largest drug population for mostly non-violent drug offenses.

As a former Anti-Money Laundering Officer at HSBC, Everett Stern was arguably never actually supposed to catch money laundering activity. Instead, with little training but an inclination to make a difference, Stern caught massive levels of fraud, and contacted CIA and FBI officials in the summer of 2010 to alert them of systematic financing for terrorist organization, drug cartels and other shady entities.

HSBC was eventually fined $1.9 billion dollars by the U.S. Treasury, but Stern recently joined Occupy Wall Streets’ Alt Banking protest (See video) – despite being a self-described conservative Republican – to call for criminal charges and accountability over what he says is continued money laundering on the part of HSBC officials.

Luke Rudkowski, of We Are Change, spoke with Everett Stern about his whistleblowing activities, and how he says the bank deliberately set itself up to fail at catching laundering transactions:

Certain companies and individuals flagged for illicit and criminal behavior are officially flagged in the system, and prohibited from authorized trade. But according to Stern, executives inside the system learned how to simply reclassify the coding to allow payments to go through to these entities.

Hundreds of millions of dollars were funneled to terrorist organizations including Hamas and Hezbollah – via the firm Tajco, operated by the Tajideen brothers – as well as drug cartels like Sinaloa and Los Zetas and Russian mobsters.

At the center of Everett Stern’s (@Twitter) whistleblowing allegations is an account of how HSBC gave the appearance of putting into place a serious anti-money laundering unit, while in actuality it hired low level debt collectors with little to no experience, after it sold off its card card division to Capitol One.

Rolling Stone’s February 2013 article ‘Gangster Bankers: Too Big to Jail’ helped but Everett Stern’s case in the spotlight. In it, Matt Taibbi explained the circumstances that led to Stern catching the illegal activity:

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From the outset, Stern knew there was something weird about his job. “I had to go to the library to take out books on money-laundering,” Stern says now, laughing. “That’s how bad it was.” There were no training courses or seminars on money-laundering­ – what it was, how to detect it. His work mainly consisted of looking up the names of unsavory characters on the Internet and then running them through the bank’s internal systems to see if they popped up on any account names anywhere.

Even weirder, nobody seemed to care if anybody was doing any actual work.

Later, Stern took it upon himself to look up suspicious names, research their connections on the Internet, and try to find them in the financial transactions database:

Soon enough, though, out of boredom and also maybe a little bit of patriotism, Stern started to sift through some of the backlogged alerts and tried to make sense of them. Almost immediately, he found a series of deeply concerning transactions. There was an exchange company wiring large sums of money to untraceable destinations in the Middle East. A Saudi fruit company was sending millions, Stern found with a simple Internet search, to a high-ranking figure in the Yemeni wing of the Muslim Brotherhood. Stern even learned that HSBC was allowing millions of dollars to be moved from the Karaiba chain of super­markets in Africa to a firm called Tajco, run by the Tajideen brothers, who had been singled out by the Treasury Department as major financiers of Hezbollah. [emphasis added]

Stern, who wanted to become a clandestine CIA agent to fight terrorism, says he’s now under threat of legal action from HSBC, but shrugged it off, telling Luke Rudkowski that he considers blowing the whistle about these activities to be a “national security issue.” Stern previously testified as a federal witness in the U.S. Government’s probe into HSBC money laundering, but unsatisfied, he continues his efforts through the grassroots to demand justice for officials involved and an end to their activities.

As Taibbi wrote, “the U.S. Justice Department granted a total walk to executives of the British-based bank HSBC for the largest drug-and-terrorism money-laundering case ever. Yes, they issued a fine – $1.9 billion, or about five weeks’ profit – but they didn’t extract so much as one dollar or one day in jail from any individual, despite a decade of stupefying abuses.”

HSBC, based in London, with U.S. offices in Delaware and around the world, is by no means the only major bank involved in money laundering for terrorists and drug dealers.

In 2011, the London Guardian reported on how Wachovia – now part of Wells Fargo – also found itself in hot water for “failing to maintain an effective anti-money laundering programme” back in 2006 after Mexican troops intercepted a plane carrying 5.7 tonnes of cocaine and $100 million, which were later traced back to laundering activities through the bank. Charges were brought against the bank, but resulted in only a relatively small fine. The Guardian reported:

Criminal proceedings were brought against Wachovia, though not against any individual, but the case never came to court. In March 2010, Wachovia settled the biggest action brought under the US bank secrecy act, through the US district court in Miami. Now that the year’s “deferred prosecution” has expired, the bank is in effect in the clear. It paid federal authorities $110m in forfeiture, for allowing transactions later proved to be connected to drug smuggling, and incurred a $50m fine for failing to monitor cash used to ship 22 tons of cocaine.

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