According to the statement of facts agreed to by U.S. Bancorp under its Deferred Prosecution Agreement (“DPA”), the Bank intentionally failed to establish, implement and maintain an adequate BSA/AML compliance program from at least 2009 to 2014.  According to U.S. Attorney for the Southern District of New York, Geoffrey S. Berman, the bank operated its BSA/AML compliance program “at a lower cost” and “concealed its illegal approach from the OCC,” resulting in “a large number” of suspicious transactions that were not identified and reported. This resolution is BSA/AML`s second major resolution this month (the other is Rabobank N.A.`s guilty plea and the $369 million fine announced on February 7, 2018). In contrast, the Department of Justice has only announced two important BSA/AML resolutions for the entire year 2017 (the Western Union DPA in January 2017 and the Banamex USA non-prosecution agreement in May 2017).  MoneyGram International announced Tuesday in a regulatory filing that it had fulfilled its obligations under a deferred prosecution agreement (DPA) it entered into with the Department of Justice eight years ago. The Anti-Money Laundering Compliance (AML) Program was also evaluated with a thumbs up by its Compliance Monitor. In addition to losing $1.256 billion under its Deferred Prosecution Agreement (DPA) with the Department of Justice, HSBC also agreed to pay $665 million in civil penalties — $500 million to the Office of the Comptroller of the Currency (OCC) and $165 million to the Federal Reserve — for its violations of the anti-money laundering program. The BCC penalty is also punishable by a $500 million civil fine from the Financial Crimes Enforcement Network (FinCEN).
The bank`s $375 million settlement agreement with OFAC will be completed by forfeiture at the Department of Justice. The UK`s Financial Services Authority (FSA) is pursuing a separate measure. A quadruple criminal case was filed today in federal court in the Eastern District of New York, accusing HSBC of intentionally failing to maintain an effective anti-money laundering (AML) program, intentionally failing to exercise due diligence with respect to its foreign correspondence partners, violating the IEEPA and violating the TWEA. HSBC waived a federal indictment, agreed to file the information, and claimed responsibility for its criminal conduct and that of its employees. “HSBC is held accountable for the astonishing surveillance failures – and worse – that led the bank to allow drug traffickers and others to launder hundreds of millions of dollars through HSBC subsidiaries and facilitate hundreds of millions of additional transactions with sanctioned countries,” deputy attorney general Breuer said. “The record of dysfunction that prevailed at HSBC for many years was staggering. Today, HSBC is paying a high price for their conduct and, under the terms of today`s agreement, we reserve the right to fully prosecute them if the bank fails to comply with the agreement in any way. U.S. District Judge Kevin Castel in Manhattan on Tuesday signed an order in which the Justice Department said it would “not sue now” Societe Generale because the bank had complied with its three-year agreement.
“Today, we are announcing the filing of criminal charges against HSBC, one of the world`s largest financial institutions,” said U.S. Attorney Lynch. “HSBC`s blatant failure to implement adequate anti-money laundering controls has facilitated the laundering of at least $881 million in drug products by the U.S. financial system. HSBC`s deliberate disregard for U.S. sanctions laws and regulations has resulted in the processing of hundreds of millions of dollars of transactions prohibited by OFAC. Today`s landmark agreement, which imposes the highest penalty ever imposed in all BSA prosecutions, makes it clear that all corporate citizens, regardless of size, must be held accountable for their actions. WASHINGTON – HSBC Holdings plc (HSBC Group) – a British company headquartered in London – and HSBC Bank USA N.A. (HSBC Bank USA) (collectively HSBC) – a government-chartered banking company based in McLean, Virginia.
– agreed to lose $1.256 billion and reached an agreement with the Department of Justice on deferring prosecutions for HSBC`s violations of the Bank Secrecy Act (BSA), the International Emergency Economic Powers Act (IEEPA) and the Trade with the Enemy Act (TWEA). According to court documents, HSBC Bank USA violated the BSA by failing to maintain an effective anti-money laundering program and by failing to conduct due diligence for its foreign correspondent account holders. HSBC Group violated the IEEPA and TWEA by illegally transacting on behalf of clients in Cuba, Iran, Libya, Sudan and Burma – all countries subject to sanctions imposed by the Office of Foreign Assets Control (OFAC) at the time of the transactions. MoneyGram closed its doors on August 8. November has reached agreements with the U.S. Department of Justice and the Federal Trade Commission on previously disclosed compliance breaches that have led to a widespread system of money laundering fraud. Deferred prosecution agreements are sometimes seen as a form of probation that allows companies to avoid criminal charges if they comply with the conditions. In a decision that further clarifies what behaviors are being prosecuted and which are not with respect to sanctions violations, the Second Circuit recently upheld the conviction of a former man. As required by the CCA, HSBC has also committed to expand anti-money laundering and other compliance obligations and to make structural changes throughout its global operations to prevent the behaviour that led to this lawsuit from recurring.