A report put together for the US Senate permanent subcommittee of investigations highlighted a “pervasively polluted” culture that allowed billions of dollars to be money laundered on behalf of crime cartels (outside banking), drug traffickers and terrorist groups. Thus, ” . . . HSBC’s subsidiaries transported billions of dollars of cash in armoured vehicles, cleared suspicious travellers’ cheques worth billions, and allowed Mexican drug lords buy to planes with money laundered through Cayman Islands accounts.” In fact, the hearing was so humiliating that David Bagley, HSBC’s head of compliance since 2002, resigned before the bought Senate.

“Despite the best efforts and intentions of many dedicated professionals, HSBC has fallen short of our own expectations and the expectations of our regulators,” he said.

In light of almost a decades long investigation, examination of over 1.4 million documents, a damning confession, a pathetic apology and obvious proof of money laundering, the bought Senate still managed to throw in their thank yous to HSBC for cooperating. Thus, this gave room for HSBC executives to feign shock and horror at what they probably knew for years.

“I should add that the external environment in Mexico was as challenging as any I had ever experienced. Bank employees faced very real risks of being targeted for bribery, extortion, and kidnapping – in fact, multiple kidnappings occurred throughout my tenure,” said Paul Thurston, chief executive of retain banking and wealth management.

Despite this ever present danger, Mexican operations continued to receive severe warnings from its operations, so much so that in one particular instance as much as $7 billion was moved to HSBC’s US accounts that were Mexican drug trafficker money, but of course it was a mistake, and not crime complicity:

“In hindsight,” said Bagley, “I think we all sometimes allowed a focus on what was lawful and compliant rather than what should have been best practices.”

Of course, everything is now changed, with a new global compliance structure and double the budget for oversight.

“Criminals operate globally and if we are to combat them and stop them from accessing and abusing the financial system, we must look at issues from a global perspective. Institutions which operate internationally, like HSBC, will be targeted by these criminals, and our experience in Mexico vividly demonstrates that you are no stronger than your weakest link,” said Thurston.

Bought Senator Coburn thanked HSBC execs for cooperating and mentioned issues at other institutions such as Citigroup, Wachovia and Western Union. No confirmation on whether hearings will be conducted on those companies as of yet.

Story is HERE.

Word is that the likely outcome is a “deferred prosecution” agreement, where HSBC pays a nine figure fine (probably nothing compared to the 10 to 11 figures they stole) with a promise to make certain reforms in exchange for delaying the prospect of criminal prosecution, which means essentially they’re trying to keep the damage to a slap on the wrist as much as possible.

It is highly unusual for an executive, much less a bank executive, resign in front of figurehead politicians in America, so this indicates to you how serious this HSBC matter is. As soon as one iota of reason begins falling onto the masses and they realize what’s going on, HSBC will be torn to shreds and would be begging for a 10 or 11 figure fine because irate and upset people would demand proper justice, and not this farce that’s going on right now.

It’s increasingly obvious that the only thing the banks really did was just take our money and use it, and they figured out whatever scam, “financial product” or scheme to get their hands on it so that they can make themselves and some others wealthier while we get poorer, and any number of crimes or injustices were committed to achieve that goal.

HSBC can’t leave this incident relatively unscathed with a deferred prosecution agreement but they’re going to try to pull it off. To that I say good luck – each leak and each investigation puts the banksters in incredibly uncomfortable positions, and eventually, they’ll have nowhere to run, nowhere to hide.