New York—U.K.-based global banking giant HSBC Group PLC and its U.S. affiliate appeared before the Senate Permanent Subcommittee on Investigations Tuesday to testify regarding the allegations of “expos[ing] the U.S. financial system to a wide array of money laundering, drug trafficking, and terrorist financing risks.”
“HSBC used its U.S. bank as a gateway into the U.S. financial system for some HSBC affiliates around the world to provide U.S. dollar services to clients while playing fast and loose with U.S. banking rules,” said the chairman of the subcommittee Sen. Carl Levin (D-Mich.), on Monday before the hearing.
During its yearlong investigation that involved the screening of millions of pages of documents and emails, as well as dozens of interviews with the bank’s management across the globe, the subcommittee uncovered several major issues that could have been easily prevented by following generally accepted Anti-Money Laundering (AML) regulations.
HSBC Bank USA Inc. processed a number of shady transactions, including bulk shipments of $7.1 billion in cash from its Mexican bank, and clearing from a Japanese bank several hundred thousand dollars in travelers’ checks per day, the ultimate origin of which was Russia.
