Page 147 - Bank Case Studies

said: "New York is the centre of international

finance and those who use our banks as a vehicle

for international crime will not be tolerated."” (2, 3)

“HSBC ran a preposterous offshore operation in

Mexico that allowed anyone to walk into any HSBC

Mexico branch and open a U.S.-dollar account

(HSBC Mexico accounts had to be in pesos) via a

so-called "Cayman Islands branch" of HSBC

Mexico. The evidence suggests customers barely
had to submit a real name and address, much less

explain the legitimate origins of their deposits.” (2)

It was also claimed that the whole Mexican/Cayman Islands

operation was a pure shell company, run by Mexicans in

Mexican bank branches. In one instance an account was
used to pay a U.S. company allegedly supplying aircraft to

Mexican drug dealers. (2)

US laws prevent banks doing business with what it regards
as the most dangerous individuals and countries. However,

HSBC frequently circumvented the rules designed to

prevent dealings with Iran, Burma, North Korea, Libya,
Sudan, and Cuba. Moreover, it was feared that such actions

could have facilitated transactions on behalf of terrorists

Actions taken to get around these safeguards in the system
may have facilitated transactions on behalf of not only drug

traffickers but also terrorists.

The Mexico debacle was only one of a number of

misconduct scandals that had hit HSBC in recent years.

These had included evidence that it helped wealthy clients