HomeNewsBriefAfter Money Laundering Probe, Mexico HSBC Branch to Close Cayman Islands Accounts
BRIEF

After Money Laundering Probe, Mexico HSBC Branch to Close Cayman Islands Accounts

MEXICO / 20 JUL 2012 BY ELYSSA PACHICO EN

The Mexican branch of British-based bank HSBC will close about 20,000 accounts in the Cayman Islands believed to have links to organized crime, after a US Senate investigation exposed the bank’s facilitation of money laundering operations.

The accounts have an estimated worth of $675 million, reports Mexico’s El Universal.

HSBC is closing the Cayman accounts in reaction to a 335-page report, the result of a year-long investigation by the US Senate, which accuses the bank of failing to enforce sufficient controls against money laundering.

The investigation has already resulted in the resignation of the bank’s global head of compliance.

The Cayman Islands have particularly weak banking oversight laws and are considered an offshore tax haven.

InSight Crime Analysis

According to El Universal, as early as 2009 the HSBC head in Mexico ordered a freezing of any new accounts created in the Cayman Islands, more indication that bank authorities knew for awhile that suspicious transactions from Mexico were taking place, but failed to take much action.

It is estimated that as much as $85 billion in drug money is laundered through US banks from Mexico per year.

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