United States: HSBC faces questions over disclosure of alleged money laundering to monitors

HSBC discovered a suspected money laundering network that received $4.2bn (£3bn) worth of payments, it has emerged, raising questions over whether it disclosed the information to US monitors who at the time were ensuring the bank cleaned up its act.

Insiders who spoke to journalists as part of a joint investigation by the Guardian and the Bureau of Investigative Journalism have suggested that HSBC may not have appropriately shared the information with the monitoring team installed by US regulators in 2012 after HSBC allowed drug cartels in Latin America to launder hundreds of millions of dollars through its accounts.

A redacted internal HSBC report, published last week by authorities in South Africa, suggests 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, who was embroiled in a national corruption scandal in South Africa. The Guptas have denied any wrongdoing.

The report – which represents findings at the time – identified three companies with accounts at its Hong Kong branch that media reports had previously concluded were controlled by associates of the Gupta family. While tracing funds flowing from these companies, bank investigators uncovered what they suspected was a professional money laundering network controlled by unrelated parties.

The network was identified as involving 92 HSBC Hong Kong accounts that received $4.2bn worth of payments between 2014 and 2017, some of which may have been used for legitimate purposes. When the report was circulated in 2017, 60 of these accounts were still open.

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 original full article can be found at theguardian.com

(Photo: Tyrone Siu/Reuters)

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