Page 12 - HSBC (D) Case Study

In Mexico the bank "severely understaffed" its
compliance department and failed to implement an anti-

money laundering programme despite evidence of
serious risks.

“A complex scheme known as the black market

peso exchange (BMPE) was used to launder the

cash. Manhattan district attorney Cyrus Vance

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