- Wednesday, August 17, 2022
By: Shilpa Sharma
HSBC may not have shared information about a suspected money laundering network with the monitoring team installed by the US regulators in 2012, a joint investigation by the Guardian and the Bureau of Investigative Journalism revealed.
The bank had discovered a suspected money laundering network that received $4.2bn (£3bn) worth of payments.
As per the investigation, HSBC allowed drug cartels in Latin America to launder hundreds of millions of dollars through its accounts.
An internal HSBC report, published last week by authorities in South Africa, suggested the bank uncovered the previously undisclosed multibillion-pound network as early as 2016, while it was trying to assess its potential exposure to the controversial Gupta family.
The Gupta brothers were embroiled in a national corruption scandal in South Africa, which is undergoing an inquiry.
Meanwhile, the Guptas have denied any wrongdoing.
The report identified three companies with accounts at its Hong Kong branch, which media previously concluded were controlled by associates of the Gupta family. While tracing funds flowing from these companies, bank discovered a professional money laundering network controlled by unrelated parties.
Money flow from Gupta-linked companies into this network was “contained and minimal”, the bank concluded, amounting to just £12m. The majority of funds passing through the network appeared to be from multiple users not connected to the Guptas.
The London-headquartered bank would have been expected to disclose the information to an independent monitor brought in by the US Department of Justice (DoJ) in 2012, when criminal proceedings were deferred on condition the bank reform its anti-money laundering checks.
As per former members of the DoJ monitoring team say they were never made aware of the network, raising questions over the transparency of HSBC with the monitor.
“HSBC never voluntarily disclosed money laundering to us. They waited to be asked about it,” the newspaper quoted a former member of the monitoring team.
“As far as I’m aware, this particular report … was never disclosed to the monitor,” former members said, adding that this appeared to be a bigger money laundering network than any they had identified at the bank.
HSBC said in a statement that it was illegal to disclose information it had shared with government authorities, and said “specific discussions with our former monitor remain confidential”
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