White Collar Roundup - January 2013

HSBC, Drugs and $1.9 Billion

Banking giant HSBC agreed to forfeit a staggering $1.256 billion, pay a $665 million fine and enter into a deferred-prosecution agreement for permitting the laundering of approximately $881 million in illegal-drug proceeds through the U.S. financial system. According to press releases from the Department of Justice (DOJ) and the U.S. Attorney's Office for the Eastern District of New York, narcotics traffickers and others laundered hundreds of millions of dollars through HSBC because of HSBC's failure to implement an appropriate anti-money laundering program and to conduct due diligence on its foreign correspondent account holders. HSBC also violated the International Emergency Economic Powers Act and the Trading with the Enemy Act by conducting transactions on behalf of clients in countries that were subject to Office of Foreign Assets Control (OFAC) sanctions at the time of the transactions, including Cuba, Iran, Libya, Sudan and Burma.