Boss of HSBC 'Was Warned about Money Laundering in 2005'

Daily Mail (London), July 19, 2012 | Go to article overview

Boss of HSBC 'Was Warned about Money Laundering in 2005'


Byline: Rob Davies and Tim Shipman

TRADE minister and former HSBC boss Stephen Green faced serious questions last night after it emerged that he was warned the bank had a lax approach to money laundering as long ago as 2005.

Lord Green is facing pressure to quit because he was chairman of Britain's biggest bank when it was doing business with Mexican drug gangs and banks linked to terrorism.

An email published as part of a US Senate probe confirms he was made aware of serious allegations of wrongdoing in January 2005 by former HSBC compliance chief, David Bagley.

Mr Bagley, who dramatically quit in front of the committee on Tuesday, told Lord Green that staff in the bank's Mexi-can subsidiary forged paperwork designed to help prevent money laundering.

He raised allegations that 'senior persons within the compliance function fabricated records of certain mandatory anti-money laundering meetings'.

The forgeries were designed to hoodwink local regulators into believing the division's safeguards were stronger and more efficient than they were.

Mr Bagley also warned that HSBC's American division had accepted $2.9million ([pounds sterling]1.8million) from clients in the military dictatorship of Burma, in contravention of US sanctions.

He said there was 'little doubt' that this breached sanctions and warned of a 'significant risk of a financial penalty'.

The email is censored, preventing disclosure of who the transaction was for. …

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