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Loretta Lynch testifies before the Senate Judiciary Committee Jan. 28.
WASHINGTON – A member of the Senate Judiciary Committee has opened an investigation he believes could threaten the confirmation of Obama’s nominee to replace Eric Holder as attorney general, Loretta Lynch.
After his staff quizzed a whistleblower provided by WND, the office of Sen. David Vitter, R-La., announced it is investigating why Lynch, in her capacity as U.S. Attorney for the Eastern District of New York, allowed banking giant HSBC to avoid criminal prosecution of bank officers and other employees. HSBC paid a hefty fine, instead, for laundering uncounted billions of dollars of illegal drug and terrorist money through its U.S. bank in the service of Mexican drug cartels and Middle Eastern terrorists.
Vitter’s staff examined allegations made since 2009 by John Cruz, a former HSBC manager armed with 1,000 pages of bank account records and recordings of employees and numerous state and federal law enforcement agents who labeled him as “crazy” rather than seriously look into his claims.
Vitter’s Washington staff spoke to Cruz in an hour-long teleconference that WND attended in the senator’s office.
The meeting left Vitter’s staff asking, “How can we allow Loretta Lynch to be the nation’s top federal law-enforcement officer when the HSBC money-laundering scandal raises questions about a cover-up that may be continuing even today?”
Read more WND coverage of the scandal: Senators ripped for bungling Obama’s AG pick
Cruz’s allegations were first reported in a series of WND stories that began with a February 2012 report. Cruz called the $1.92 billion fine the U.S. government imposed on HSBC “a joke” and filed a $10 million lawsuit for “retaliation and wrongful termination.” Whistleblowers in India and London joined Cruz in charging the HSBC settlement amounted to a massive cover-up.
In response to WND’s reporting of Cruz’s evidence, HSBC lodged a complaint that blocked Internet access to one of the WND stories, and senior reporter Jerome Corsi was fired by the New York City investment firm he had worked with for two years as a senior managing director, Gilford Securities.
WND also reported evidence Holder’s Justice Department did not investigate money-laundering charges in deference to bank clients of his Washington-based law firm, where he was a partner prior to joining the Obama administration. In addition, WND reported HSBC was engaged in a systematic scheme to defraud citizens of India who live abroad out of billions of dollars in investment accounts.
Formal investigation
At the conclusion of the meeting Wednesday, Vitter’s staff authorized WND to announce the senator has decided to open a formal investigation into Cruz’s allegations against HSBC.
Vitter’s staff explained that at the center of the investigation will be the question of whether Lynch, acting in her capacity as U.S. attorney for the Eastern District of New York, had engineered or knowingly participated in a government settlement in 2012 that allowed HSBC senior management to avoid criminal prosecution.
HSBC was allowed to admit only deficiencies in administrating anti-terrorism, money laundering statutes while bank employees down to the branch level who laundered billions of dollars in Mexican drug cartel and Middle Eastern terrorist money were let off the hook, with many remaining as employees of the bank even today.
A Department of Justice press release Dec. 11, 2012, named Lynch, representing the Justice Department, in its civil settlement with HSBC.
The bank agreed to pay a fine of $1.256 billion and an additional $665 million in civil penalties in exchange for “deferred prosecution.” The DOJ agreed not to pursue any criminal prosecutions of HSBC officers or employees after a probe in which DOJ criminal investigators were joined by investigators from the U.S. Immigration and Customs Enforcement, the Department of Homeland Security, the New York County District Attorney’s Office and the U.S. Treasury.
The investigation found HSBC had violated numerous anti-money laundering statutes, processing billions of dollars of transactions for Mexican drug cartels and Middle East terrorist organizations.
“I was told in 2009 that HSBC had reserved $2 billion to pay government fines as a cost of doing business to avoid criminal prosecutions in the money-laundering case,” Cruz told WND.
“It’s a travesty of justice that no one at HSBC got prosecuted when HSBC laundered billions of dollars of drug for Mexican drug cartels and laundered billions more for Middle Eastern terrorists, in a massive bank fraud scheme I can prove HSBC bank officials knew was going on from the highest executives in the bank to branch managers and employees throughout the HSBC bank,” he said.
In 2012, Cruz turned over to WND some 1,000 pages of customer account records he pulled from the HSBC computer system before he was fired by HSBC senior management uninterested in investigating his claims. He also recorded hours of conversations with HSBC bank managers and compliance officers, and various law enforcement officers, none of whom took his allegations seriously.
“I tried for years, starting in 2009, to bring this to the attention of law enforcement agencies in New York State and the federal government, including the Department of Homeland Security and the IRS, that HSBC was engaged in a massive multi-billion dollar international scheme of laundering drug and terrorist money, and nobody was interested,” Cruz said.
“What I got for my efforts was bank officers, including bank compliance officers, told me to forget about it. And when I didn’t forget about it, HSBC fired me in February 2010, after give me a bad performance review,” he said.
Cruz began working at HSBC on Jan. 14, 2008, and was terminated for “poor job performance” on Feb. 17, 2010.
“When I heard about the DOJ settlement, I was shocked,” Cruz said. “I couldn’t believe the federal government settled with HSBC, with the federal government allowing all of the many HSBC employees I could prove were involved in perpetrating this massive illegal money-laundering to go free.
“I lost my job, and the criminals in HSBC laundering drug and terrorist money, while engaging in massive tax evasion defrauding the federal government out of billions in tax revenue, got to keep their jobs,” he said, and “many are still employed by the bank today.”
Bogus accounts
Cruz told WND that as a relationship manager for HSBC, it was his responsibility to look up various accounts in the computer system and go to visit the account holders in person and offer them additional products and services.
“I pulled these documents because I thought they were evidence of suspicious activity taking place,” Cruz affirmed when presented by WND with various HSBC computer ledgers of customer accounts. “These same documents I brought to bank security and my managers in the bank.”
To his surprise, HSBC management and bank security did not welcome his reports of suspicious activity.
“My managers told me I was crazy and I didn’t know what I was talking about,” he said. “They told me it was none of my business what goes on in transactions; but that’s my job.”
WND showed Cruz the HSBC account ledger for a business named “United Express.”
“It was supposed to be a shipping company that does over $2 million a year in transactions,” Cruz said, recognizing the HSBC computer-generated account ledger. “But the ledger shows millions and millions of dollars in transactions, but the transactions are all through PayPal and American Express.”
Cruz also described his visit to see the company in person.
“There were two employees on site that didn’t speak English,” he recalled. “The only evidence of any packaging being done was a couple of small boxes in the corner.”
Suspicious activity
Cruz showed WND a redacted HSBC account ledger for a company indicating more than $1.34 million in deposits and $1.23 million in withdrawals in a one-month period from July 21, 2009, to Aug. 20, 2009.
“The account does not say where the money comes from or where it is going to,” Cruz noted. “It’s just a transaction. But the money gets transferred out of the account. Where does it go? The bank won’t explain it, but they know exactly where it goes. If it goes from here down to Malaysia, Brazil, Columbia, Hong Kong – the bank knows exactly where it’s going, because the bank owns the branches in those countries.”
Money, he said, “comes in daily, thousands of dollars, always in even amounts.”
“You look at a statement and it says ‘transfer,’ but where did it go? There’s no account number or tracking number that documents where the transaction went,” he pointed out.
Cruz contends HSBC was running what amounted to a “shell game.”
“So many of these businesses are conducted out of a person’s home,” he said. “I would walk into these homes. There’s a couch, there’s a chair, a desk, but the house is empty – a couple of Mercedes sitting out front. But where is the business? It’s only online transactions of money in and money out.”
Identity theft
Cruz said his 1,000 pages of customer accounts show that to implement the money-laundering scheme, HSBC relied on identity theft. Social Security numbers were stolen to create the bogus retail and commercial bank accounts through which HSBC employees systematically deposited and withdrew hundreds of millions of dollars on a daily basis, apparently without the knowledge of the identity-theft victims.
“When an individual finds out they got a loan they never knew about, 5 percent of that loan went to the accounting firm that made up the phony tax returns and the other 95 percent of that loan went to the manager,” he charged.
“One manager was involved in the transaction, another manager was involved in notarizing the transaction, and senior management was involved where they signed off permission to give the loans even when the loans get rejected by underwriting.”
‘Criminal enterprise’
Cruz told WND he recorded hundreds of hours of meetings he conducted with HSBC management and bank security personnel, during which, he charged, various bank managers were engaging in criminal acts.
“I have hours of hours of recordings, ranging from bank tellers, to business representatives, to branch managers, to executives,” he said. “The whole system is designed to be a culture of fraud to make it look like it’s a legal system. But it’s not.”
Cruz explained that even when he let bank managers know he was taping the conversation, the managers were not interested in what he was saying.
“HSBC is a criminal organization,” he said. “It is a culture of crime.”
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Thu, 12 Feb 2015 01:42:26 GMT
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