US refused to prosecute HSBC money launderers


US officials refused to prosecute UK-based HSBC bank for money laundering in 2012 because of fears that it would cause a ‘global financial disaster’, a report says.

A US Congress report reveals UK officials, including Chancellor Osborne, applied pressure on the US, ‘hampered’ the probe and ‘influenced’ its outcome. HSBC was accused of allowing the Sinaloa drug cartel in Mexico and Norte del Valle cartel in Colombia to launder $881m.

The bank, which has its headquarters in London, paid a $1.92bn (£1.48bn) settlement but did not face criminal charges and no top officials at HSBC faced any charges. The report says: ‘George Osborne, Chancellor of the Exchequer, the UK’s chief financial minister, intervened in the HSBC matter by sending a letter to Federal Reserve Chairman Ben Bernanke… to express the UK’s concerns regarding US enforcement actions against British banks.’

The letter said that prosecuting HSBC could have ‘very serious implications for financial and economic stability, particularly in Europe and Asia.’ The report also accuses former US Attorney General Eric Holder of misleading Congress about the decision.

The report says Holder ignored recommendations by more junior staff to prosecute HSBC because of the bank’s ‘systemic importance’ to the financial markets. ‘Rather than lacking adequate evidence to prove HSBC’s criminal conduct, internal Treasury documents show that DoJ (Department of Justice) leadership declined to pursue (the) recommendation to prosecute HSBC because senior DoJ leaders were concerned that prosecuting the bank “could result in a global financial disaster”,’ the report said.

Meanwhile, the Bank of England governor Mark Carney has hit back at Chancellor George Osborne who is demanding that the minutes of private Bank of England meetings are made public.

Carney has been accused of bias in the lead up to the Brexit vote. Supporters of Leave – including two former Conservative Chancellors – accused him last month of ‘peddling phoney forecasts’. Carney has conceded that minutes of their private talks on Brexit may be examined ‘discreetly’ by MPs.

He denied again that the Bank of England had tried to ‘frighten’ the public about the negative effect a Brexit vote could have on the economy. Carney said: ‘It is our responsibility to give these assessments… we have an obligation to make these assessments.

‘The debate cannot be about whether we should have made an assessment. If we view something as the biggest risk, we have an obligation, a statutory obligation, to make that clear to parliament. We have an obligation to the people of the United Kingdom to come straight with them.’

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