The utterly incompetent prosecutors at the Department of Justice politely decline to indict HBSC or any of its present or former employees. Because, you know, things like this just happen and besides some of the responsible people don’t live here, and some of them got fired and others lost their bonuses, which is punishment enough. And anyway, we can’t indict unless we find evidence that someone specifically intended to aid money laundering. Or, as the simpering Lanny Breuer puts it:
“As bad as HSBC’s conduct was, this is not a case where the HSBC people intended — intended — to create money laundering,” he said. “They did not have the controls in place that they needed.”
One of the relevant statutes, 18 USC §1956, can be found here. In short, it’s a crime
“…knowing that the property involved in a financial transaction represents the proceeds of some form of unlawful activity, [to] conduct or attempt to conduct such a financial transaction which in fact involves the proceeds of specified unlawful activity [and]
(B) knowing that the transaction is designed in whole or in part—
(i) to conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds of specified unlawful activity; [grammatical changes to make readable.]
As used in this section—
(1) the term “knowing that the property involved in a financial transaction represents the proceeds of some form of unlawful activity” means that the person knew the property involved in the transaction represented proceeds from some form, though not necessarily which form, of activity that constitutes a felony under State, Federal, or foreign law, regardless of whether or not such activity is specified in paragraph (7);
(f) There is extraterritorial jurisdiction over the conduct prohibited by this section if—
(1) the conduct is by a United States citizen or, in the case of a non-United States citizen, the conduct occurs in part in the United States; and
(2) the transaction or series of related transactions involves funds or monetary instruments of a value exceeding $10,000.
Here’s an example of what HBSC and its employees did, taken from the Statement of Facts attached to the Deferred Prosecution Agreement (thanks, USA Today).
… [D]rug traffickers were depositing hundreds of thousands of dollars in bulk U.S. currency each day into HSBC Mexico accounts. In order to efficiently move this volume of cash through the teller windows at HSBC Mexico branches, drug traffickers designed specially shaped boxes that fit the precise dimensions of the teller windows. The drug traffickers would send numerous boxes filled with cash through the teller windows for deposit into HSBC Mexico accounts. After the cash was deposited in the accounts, peso brokers then wire transferred the U.S. dollars to various exporters located in New York City and other locations throughout the United States to purchase goods for Colombian businesses. The U.S. exporters then sent the goods directly to the businesses in Colombia.
HBSC admits that this is true in the Deferred Prosecution Agreement. Indicting the people who did this is apparently asking too much of these incompetent prosecutors. Here’s a clip of Lanny Breuer explaining (at about the 1:15 minute mark) that this agreement that no one is criminally liable is really a triumph of the prosecutorial art.
The reporters who go to press conferences like Breuer’s don’t know enough to ask Breuer and his crowd of incompetents which part of the statute they can’t prove. And why they can’t extradite and try anyone in any other country who was involved. The Statement of Facts is full of similar stories and identifies the kinds of people subject to indictment. And I bet the junior criminals would rat out their superiors in a heartbeat.
Breuer hides his bank love behind a statement of facts drafted to make it look like the only problems with this criminal money laundering business were mere negligent administrative screw-ups, and that’s nothing, now is it, Lanny? The clown prosecutors can’t imagine that a bunch of people thought they could make a huge pile of money laundering cash for drug cartels, terrorists and other scum of the earth. Now that they have slapped HSBC on the wrist, Lanny and his posse of lawyers who passed the bar on their third try can get back to work prosecuting pot smokers.
Knowing that his legal rationalizations are stupidly false, Breuer seeks the refuge of neoliberal apparatchiks: think of the jobs! Indicting this nest of rattlesnakes would lead to shutting down its US operations, costing jobs and disrupting the economy. That isn’t true either. Remember Riggs Bank? When it got caught doing a lot of the same stuff, it got clobbered, and shut down the criminal operation. The rest was absorbed into another bank. Why shouldn’t that happen to HSBC? Why shouldn’t we shut down their US operations?
The Obama administration regularly sacrifices the rule of law in adoration ceremonies to the Baals of the Financial Sector. The smoke rises to the heights proving their devotion, as the bag boys rush into the sacristy with some of that blessed money.