Drug war ensnares big banks for letting Mexico cartels stash cash

MEXICO CITY ? On the facade of the tall HSBC bank headquarters here, there?s a dark reflection of the Angel of Independence monument, one of the most iconic landmarks in this capital city.

The towering bank?s central location at the Plaza of Independence is a metaphor for its importance to Mexico?s financial system.

?It?s in the heart of the capital, in the most emblematic part of [the city],? said Myrna de los Santos, a finance professional who works in one of the neighboring glass office buildings. Looking up at HSBC Tower, she said, ?This is the bank that?s been accused of laundering money.?

HSBC and other major banks have been accused of helping launder money for the narco criminals seen waging a brutal war in Mexico largely to win drug markets in the United States.

HSBC officials say they are cooperating with investigators. ?What happened in Mexico and the US is shameful, it?s embarrassing, it?s very painful for all of us in the firm,? HSBC?s CEO Stuart Gulliver said in a July 30 conference call.

The accusations come as Mexican and US authorities have ramped up crackdowns on transnational crime rings? vast earnings. Government prosecutors say they are chasing down drug profits and more aggressively targeting the financial institutions that let those profits amass in their vaults.

A US Senate investigation has accused HSBC of laundering $7 billion, transferring funds for Mexican clients through accounts in the Cayman Islands to accounts in the US.

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Bank of America allegedly opened and operated accounts for a US-based money laundering racket run by Los Zetas, Mexico?s most violent criminal organization. The Zetas allegedly used Bank of America accounts to buy $4 million worth of horses, and enter and win races, sometimes collecting nearly $1 million per victory, according to a New York Times report. (Bank of America has not been accused of wrongdoing and is reportedly cooperating with a US Federal Bureau of Investigation inquiry into the Zetas activities.)

HSBC, Citi, and Spain?s Banco Santander have all been accused of engaging in business transactions with Mexican money exchange houses that are suspected of money laundering.

HSBC is likely to be the first of these to reach a settlement with US authorities this year. On July 30, the bank announced it had set aside $700 million to cover the possible costs of a settlement of the money laundering investigation.

Duncan Wood, who

http://www.globalpost.com/dispatch/news/regions/americas/mexico/120921/drug-war-cartels-money-laundering-banks

Source: http://www.globalpost.com/dispatch/news/regions/americas/mexico/120921/drug-war-cartels-money-laundering-banks

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