WASHINGTON — British bank HSBC violated the Bank Secrecy Act in connection with the laundering of money from narcotics drug traffickers in Mexico and intentionally allowed prohibited transactions with Iran and other nations that have been under sanctions, the Justice Department alleged Tuesday.
In court papers filed in federal court in Brooklyn, the federal government said the case against HSBC is related to the laundering of proceeds from narcotics trafficking via the Black Market Peso Exchange — a method by which money launderers convert cash narcotics dollars into Colombian pesos by buying and re-selling wholesale consumer goods.
“The lack of an effective anti-money laundering program at HSBC Mexico and HSBC Bank USA, N.A. contributed to the conduct charged” in the money-laundering case against narcotics traffickers, Justice Department prosecutors said in court papers.
The government alleges that HSBC intentionally allowed prohibited transactions with Iran, Libya, Sudan and Burma. The federal government also said the bank facilitated transactions with Cuba in violation of the Trading With the Enemy Act.
The documents say the prohibited transactions with Iran, Libya, Sudan and Burma took place from 2001 through 2006.