'HSBC involved with drug cartels'
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US prosecutors, who have launched an investigation into the money transaction by some global banks, suspect HSBC could have laundered money for Mexican drug cartels and moved cash for Saudi Arabian banks with ties to terrorists.
According to a New York Times report, Federal authorities, with knowledge of the investigation, said federal and state prosecutors are also investigating whether HSBC flouted US law by transferring money through its American subsidiary for sanctioned nations, including Iran, Sudan and North Korea.
HSBC could have to cough up nearly a billion dollars to settle the inquiry, making it the largest such settlement in history, the authorities said.
"The money-laundering accusations against HSBC so far are more extensive than the potential violation of United States sanctions that is the focus of the investigations against other foreign banks, including Deutsche Bank and Commerzbank of Germany, BNP Paribas and Crédit Agricole of France and the Royal Bank of Scotland," the report quoted the law enforcement authorities as saying.
HSBC came under the US scanner in July when the Senate Permanent Subcommittee on Investigations said the bank "exposed the U.S financial system to money laundering and terrorist financing risks" between 2001 and 2010.
HSBC bank executives had testified at the hearing and apologised for the bank's past conduct, promising reform.
A HSBC spokesperson said in a statement that the case is "not about HSBC complicity in money laundering". The spokesperson added: "Rather, it's about lax compliance standards that fell short of regulators' expectations and our expectations, and we are absolutely committed to remedying what went wrong and learning from it".
HSBC had reached out to federal prosecutors in July, hoping to resolve the matter by September. However a settlement in the next couple of weeks is highly unlikely, the officials said.
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