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In related news: http://www.globalpost.com/dispatch/news/regions/americas/united-states/140121/hsbc-paying-2-billion-drug-money-laundering-cartel http://www.glo

by gst 13y ago

In related news: http://www.globalpost.com/dispatch/news/regions/americas/united-states/140121/hsbc-paying-2-billion-drug-money-laundering-cartel http://www.globalpost.com/dispatch/news/regions/americas/uni...

JetSpiegel 13y ago
Silk Road isn't too big to fail.
rayiner 13y ago
I suggest you read the e-mail exchanges in the indictment, for example starting on page 15: http://www.scribd.com/doc/202555785/United-States-vs-Charles-Shrem-and-Robert-M-Faiella http://www.scribd.com/doc/202555785/United-States-vs-Charles.... There is a huge difference between having controls that were too weak to catch money laundering activity in Mexico, and the CEO deliberately bypassing money laundering controls in order to sell BTC to Silk Road users. The indictment in HSBC is full of stuff like "HSBC ignored government recommendations that Mexico be treated as a high-risk area instead of a medium-risk area..." This indictment has deliberate, knowing activity on the part of Shrem that, as the e-mails indicate, even he thinks is illegal.
- mdp 13y ago
  This is simply not true. 'In some of the documents, prosecutors allege that HSBC intentionally flouted the law. The bank created an operation that was a "systemically flawed sham paper-product designed solely to make it appear that the Bank has complied" with the Bank Secrecy Act and is able to detect money laundering, wrote William J. Ihlenfeld II, U.S. Attorney for the Northern District of West Virginia, in a draft of a 2010 letter addressed to Justice Department officials.' 'In one email exchange submitted as evidence in that case, employees debated whether the bank should help a Miami client get around U.S. sanctions by moving the client's business to HSBC's Hong Kong office. "I believe that the best outcome would be for the customer to open a relationship with Hong Kong just for leters (sic) of credit purposes. He travels there all the time," private banker Antonio Suarez wrote in a 2008 email. Suarez has since left the bank and couldn't be reached for comment.' http://mobile.reuters.com/article/idUSBRE8420FX20120503?irpc=932 http://mobile.reuters.com/article/idUSBRE8420FX20120503?irpc...
  - bd_at_rivenhill 13y ago
    Hmm, looks like Suarez wasn't arrested either.
    - notahacker 13y ago
      That content of that cited email is ambiguous as to whether the banker in question had any reason to believe the client was guilty of anything (as opposed to operating a legitimate business inconvenienced by his country of origin) Regardless of what he did and didn't know, or the intricacies of legislation around letters of credit, he was smart enough not to write "cool" in response to an email to the effect "so many of his transactions smell like fraud or money laundering", never mind negotiating a "kickback" by email. It's kind of hard to plead innocent when you do that.
  - rayiner 13y ago
    From your article: "HSBC did so, they say, by not adequately reviewing hundreds of billions of dollars in transactions for any that might have links to drug trafficking, terrorist financing and other criminal activity." From the indictment: "Shrem email accounts reflect that 'BTCKing' not only obtained his supply of Bitcoins through the Company, but did so with extensive support from SHREM." If the DOJ had an e-mail trail of anyone important at HSBC giving personal technical support to a drug cartel, the outcome would have been very different. Remember, "allegations" are just that, and there is a gap between what the prosecutors might allege and what they can prove in court. The proof in this case is a slam dunk. It combines explicit support for BTCKing with explicit knowledge of his illegal activity. In HSBC's case, that link is missing. You have emails like the one you quoted, which could be interpreted as wrongdoing, or could just be interpreted as figuring out how to let a client do what he wants in a legal way by dealing with a different office.
- sixothree 13y ago
  I really don't see the difference here. Some of the allegations against HSBC are extremely damning. It is hard to believe they did anything other than deliberately ignore laws to facilitate money laundering. The only thing they didn't do is advertise directly to drug kingpins. Then again, we don't know that they didn't.

by gst 13y ago

JetSpiegel 13y ago

Silk Road isn't too big to fail.

rayiner 13y ago

I suggest you read the e-mail exchanges in the indictment, for example starting on page 15: http://www.scribd.com/doc/202555785/United-States-vs-Charles-Shrem-and-Robert-M-Faiella http://www.scribd.com/doc/202555785/United-States-vs-Charles.... There is a huge difference between having controls that were too weak to catch money laundering activity in Mexico, and the CEO deliberately bypassing money laundering controls in order to sell BTC to Silk Road users. The indictment in HSBC is full of stuff like "HSBC ignored government recommendations that Mexico be treated as a high-risk area instead of a medium-risk area..." This indictment has deliberate, knowing activity on the part of Shrem that, as the e-mails indicate, even he thinks is illegal.

mdp 13y ago
This is simply not true. 'In some of the documents, prosecutors allege that HSBC intentionally flouted the law. The bank created an operation that was a "systemically flawed sham paper-product designed solely to make it appear that the Bank has complied" with the Bank Secrecy Act and is able to detect money laundering, wrote William J. Ihlenfeld II, U.S. Attorney for the Northern District of West Virginia, in a draft of a 2010 letter addressed to Justice Department officials.' 'In one email exchange submitted as evidence in that case, employees debated whether the bank should help a Miami client get around U.S. sanctions by moving the client's business to HSBC's Hong Kong office. "I believe that the best outcome would be for the customer to open a relationship with Hong Kong just for leters (sic) of credit purposes. He travels there all the time," private banker Antonio Suarez wrote in a 2008 email. Suarez has since left the bank and couldn't be reached for comment.' http://mobile.reuters.com/article/idUSBRE8420FX20120503?irpc=932 http://mobile.reuters.com/article/idUSBRE8420FX20120503?irpc...
- bd_at_rivenhill 13y ago
  Hmm, looks like Suarez wasn't arrested either.
  - notahacker 13y ago
    That content of that cited email is ambiguous as to whether the banker in question had any reason to believe the client was guilty of anything (as opposed to operating a legitimate business inconvenienced by his country of origin) Regardless of what he did and didn't know, or the intricacies of legislation around letters of credit, he was smart enough not to write "cool" in response to an email to the effect "so many of his transactions smell like fraud or money laundering", never mind negotiating a "kickback" by email. It's kind of hard to plead innocent when you do that.
- rayiner 13y ago
  From your article: "HSBC did so, they say, by not adequately reviewing hundreds of billions of dollars in transactions for any that might have links to drug trafficking, terrorist financing and other criminal activity." From the indictment: "Shrem email accounts reflect that 'BTCKing' not only obtained his supply of Bitcoins through the Company, but did so with extensive support from SHREM." If the DOJ had an e-mail trail of anyone important at HSBC giving personal technical support to a drug cartel, the outcome would have been very different. Remember, "allegations" are just that, and there is a gap between what the prosecutors might allege and what they can prove in court. The proof in this case is a slam dunk. It combines explicit support for BTCKing with explicit knowledge of his illegal activity. In HSBC's case, that link is missing. You have emails like the one you quoted, which could be interpreted as wrongdoing, or could just be interpreted as figuring out how to let a client do what he wants in a legal way by dealing with a different office.
sixothree 13y ago
I really don't see the difference here. Some of the allegations against HSBC are extremely damning. It is hard to believe they did anything other than deliberately ignore laws to facilitate money laundering. The only thing they didn't do is advertise directly to drug kingpins. Then again, we don't know that they didn't.