Dumb Eric Holder!

Holder ā€˜Misled Congressā€™ about HSBC...
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Holder ā€˜Misled Congressā€™ on ā€˜Too Big to Jailā€™ Wall St. Bank
July 19, 2016 -- Former Attorney General Eric Holder ā€œoverruled internal recommendationsā€ and ā€œmisled Congressā€ when the Department of Justice (DOJ) declined to prosecute HSBC Bank USA and its UK-based holding company for ā€œserious violations of U.S. anti-money laundering and sanctions lawsā€ involving drug cartels and foreign terrorist groups, according to a new congressional report.
The report, released last week by the House Financial Services Committee, is entitled Too Big To Jail: Inside the Obama Justice Departmentā€™s Decision Not to Hold Wall Street Accountable. The final DPA [deferred prosecution agreement] between DOJ and HSBC in 2012 contained ā€œlanguage that appears to insulate HSBC and its employees, officers, and directors from prosecution for illegally processing certain transactions with persons or entities designated by [the Treasury Departmentā€™s] OFAC [Office of Foreign Assets Control] at the time of the transaction as Specially Designated Terrorists, Specially Designated Global Terrorists, Foreign Terrorist Organizations, and proliferators of Weapons of Mass Destruction,ā€ the report stated.

The five-year DPA required HSBC to pay a total of $1.92 billion in penalties for laundering $881 million for international drug cartels through the U.S. financial system, ā€œincluding proceeds of drug trafficking by the Sinaloa Cartel in Mexico and the Norte del Valle Cartel in Colombia,ā€ according to the report. Under the USA Patriot Act, financial institutions are required to verify the identity of their customers, set up anti-money laundering (AML) programs and controls, and report any suspicious transactions to law enforcement. As part of the DPA, HSBC also admitted it violated the Bank Secrecy Act, the International Emergency Economic Powers Act, and the Trading with the Enemy Act by ā€œillegally conducting transactions on behalf of customers in Cuba, Iran, Libya, Sudan and Burmaā€”all countries that were subject to sanctionsā€ enforced by OFAC.

As a result, the bank became ā€œthe preferred financial institution for drug cartels and money launderers,ā€ the report noted. Yet none of the bankā€™s directors, officers or employees were ever prosecuted for criminal violations of federal law. ā€œNotably, despite having to pay a record U.S. penalty in connection with the DPA, neither HSBC nor any of its executives or employees were ever prosecuted, let alone convicted for any of the serious violations,ā€ the report points out. On March 15, 2013 Holder testified before the House Judiciary Committee that while ā€œit was difficult at times to bring cases against large financial institutions because of the potential consequencesā€¦ let me be very, very, very clear. Banks are not too big to jail. If we find a bank or a financial institution that has done something wrong, if we can prove it beyond a reasonable doubt, those cases will be brought.ā€

However, internal Treasury documents obtained by the committee ā€œreveal a very different story,ā€ the report stated. ā€œIt is clear from internal Treasury records that DOJā€™s decision to decline to prosecute HSBC was not due to a lack of evidence of HSBCā€™s wrongdoing.ā€ The documents ā€œraise very serious concerns about DOJā€™s DPA deal with HSBC in late 2012ā€”not the least of which is that DOJ declined to prosecute anyone involved in a massive breach of U.S. anti-money laundering and sanctions laws due to HSBCā€™s large size and ā€˜systemic importanceā€™,ā€ the report stated. A Sept. 10, 2012 letter sent to then-Federal Reserve Board Chairman Ben Bernanke and then-Treasury SecretaryTimothy Geithner by the UKā€™s chief financial minister warned that prosecuting HSBC ā€œcould lead to [financial] contagion.ā€

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