On July 24, liquidator MoneyGram International Inc. amended its deferred prosecution agreement with the U.S. Department of Justice, the Criminal Division, the Money and Asset Recovery Section, and the Middle District of Pennsylvania. The amendment extends MoneyGram`s payment period by six months. Since 2007, the USPIS and the U.S. Attorney`s Office for the Central District of Pennsylvania have been investigating and tracking consumer fraud schemes through MoneyGram`s money transfer system. To date, the U.S. Attorney`s Office in the Middle District of Pennsylvania has indicted 37 MoneyGram agent owners for conspiracy, money laundering, and fraud-related offenses. Twenty-eight of the defendants were convicted. In addition to the $1.256 billion loss under its Deferred Prosecution Agreement (DPA) with the Department of Justice, HSBC also agreed to pay $665 million in civil penalties – $500 million to the Office of Currency Accounts (OCC) and $165 million to the Federal Reserve – for violating the AML program. The OCC fine also satisfies a $500 million civil fine from the Financial Action Network for Financial Crimes (FinCEN). The bank`s $375 million settlement agreement with OFAC is respected by the forfeiture from the Department of Justice.
The UK Financial Services Authority (FSA) applies a separate measure. The company requested an extension of the due date and a reduction in the last payment of $US 55 million due under the deferred prosecution agreement, saying “circumstances have changed since the conclusion of the previous February 25 amendment.” According to court documents, HSBC Bank USA was underutilized between 2006 and 2010 and failed to implement an anti-money laundering program capable of adequately monitoring suspicious transactions and activities of HSBC Group Affilliates, particularly HSBC Mexico, one of HSBC Bank USA`s largest Mexican clients. These include the failure to monitor billions of dollars when purchasing physical U.S. dollars or “notes” from these subsidiaries. Despite evidence of serious money laundering risks related to activity in Mexico, HSBC Bank USA ranked Mexico as the “standard risk” from at least 2006 to 2009, the lowest amL risk category. As a result, HSBC Bank USA did not monitor during this period more than $670 billion in funds and more than $9.4 billion in physical dollar purchases from HSBC Mexico, when HSBC made HSBC Mexico`s lax controls to be the preferred financial institution for drug cartels and money launderers. “Cartels and criminal organizations are fueled by money and profits,” ice director Morton said. “Without their illegal revenues used to fund criminal activities, the vital element of their operations is disrupted. Thanks to internal security investigations and our El Dorado task force, this financial institution is held to account for turning a blind eye to the money laundering that took place before its eyes.
HSI will continue to aggressively target financial institutions whose inaction contributes in particular to the ravages of international drug trafficking. There will also be a high price for allowing dangerous criminal enterprises. On April 20, 2020, U.S. Attorney Geoffrey Berman announced criminal charges against the Industrial Bank of Korea (IBK) for violating the Bank Secrecy Act (BSA) and failing to implement an acceptable anti-money laundering program at his New York facility, resulting in more than a billion dollars in illegal transactions in violation of the International Emergency Economic Powers Act.