HomeNewsBriefHSBC Exposed US to Mexican Drug Money: Senate
BRIEF

HSBC Exposed US to Mexican Drug Money: Senate

MEXICO / 19 JUL 2012 BY MICHAEL KANE EN

A US Senate report found that Mexican drug cartels were able to launder billions of dollars through HSBC bank due to weak internal controls and a lack of action by US regulators.

Senator Carl Levin said that through its US operations, London-based HSBC had “exposed the United States to Mexican drug money.”

The bank’s Mexican affiliate moved $7 billion to the US operation between 2007 and 2008, despite signs that the money could be coming from Mexican cartels, said the report. The Senate subcommittee accused executives of failing to take action on employees’ complaints and warnings, and said the bank had “actively circumvented US safeguards.”

The report also found that US regulators failed to act, despite evidence of the problems with HSBC's internal regulations. The US agency charged with overseeing HSBC’s US operation, the Office of the Comptroller of the Currency (OCC), “tolerated” the bank’s lax controls and "failed to take a single enforcement action" against HSBC for six years until 2010.

As Forbes pointed out, HSBC is not accused of participating in or knowingly allowing money laundering to occur, but failing to maintain the reporting standards and vigilance necessary to detect it.

InSight Crime Analysis

The HSBC investigation is one of a number inquiries into international banks’ roles in money laundering for drug cartels. Some reports estimate that as much as $85 billion in drug money is laundered through US banks from Mexico per year.

Last year, Wachovia bank (which has since been absorbed by Wells Fargo) was accused of failing to carry out proper oversight of $420 billion that passed through its accounts. Some of that money was discovered to belong to the Sinaloa Cartel, and was later used to buy planes to smuggle drugs. The bank paid a fine of only $160 million, less than 2 percent of its 2009 profits.

Last month, a high-profile horse breeding business in the US run by the brother of Zetas boss Miguel Angel Treviño, alias “Z-40,” was accused of being a money laundering front for the gang. According to FBI testimony, the scheme used Bank of America accounts to move Zetas money across the border to the US. Although the bank is not facing prosecution, the fact that Treviño’s brother was able to coordinate the operation without raising any red flags for Bank of America is a troubling indication of a lack of proper controls within the US financial system.

share icon icon icon

Was this content helpful?

We want to sustain Latin America’s largest organized crime database, but in order to do so, we need resources.

DONATE

What are your thoughts? Click here to send InSight Crime your comments.

We encourage readers to copy and distribute our work for non-commercial purposes, with attribution to InSight Crime in the byline and links to the original at both the top and bottom of the article. Check the Creative Commons website for more details of how to share our work, and please send us an email if you use an article.

Was this content helpful?

We want to sustain Latin America’s largest organized crime database, but in order to do so, we need resources.

DONATE

Related Content

ELITES AND CRIME / 30 JUN 2021

The embattled governor of a northern border state in Mexico is touting the timely arrests of those allegedly responsible for…

MÉXICO / 25 MAR 2022

According to the Mexican president, the recent arrest of the alleged leader of the Northeast Cartel followed by a major…

HOMICIDES / 18 AUG 2022

Mexico saw outbreaks of violence last week in three different states. What can these events tell us about the country's…

About InSight Crime

LA ORGANIZACIÓN

Extensive Coverage of our Chronicles of a Cartel Bodyguard

23 SEP 2022

Our recent investigation, A Cartel Bodyguard in Mexico’s 'Hot Land', has received extensive media coverage.

THE ORGANIZATION

InSight Crime, American University Host Illegal Fishing Panel

19 SEP 2022

InSight Crime and the Center for Latin American & Latino Studies (CLALS) at American University discussed the findings of a joint investigation on IUU fishing at a September 9 conference.

THE ORGANIZATION

Impact on the Media Landscape

9 SEP 2022

InSight Crime’s first investigation on the Dominican Republic made an immediate impact on the Dominican media landscape, with major news outlets republishing and reprinting our findings, including in …

THE ORGANIZATION

InSight Crime Sharpens Its Skills

2 SEP 2022

Last week, the InSight Crime team gathered for our annual retreat in Colombia, where we discussed our vision and strategy for the next 12 months.  During the week, we also learned how to…

THE ORGANIZATION

Colombia’s Fragile Path to Peace Begins to Take Shape

26 AUG 2022

InSight Crime is charting the progress of President Gustavo Petro’s agenda as he looks to revolutionize Colombia’s security policy, opening dialogue with guerrillas, reforming the military and police, and…