While working for HSBC, a major British Bank, in the Long Island area of New York
John Cruz, author of World Banking, World Fraud: Using Your Identity, was told by fellow bankers in 2008 they knew Bernie Madoff was a complete fraud. Obviously, many people from the Long Island area were hurt tremendously by the Madoff fraud and Cruz knew someone at the bank who lost around $2-million collapse of the Madoff scheme.
Many red flags had been raised about Madoff fraud but regulators willfully ignored them all, and that gets right into the money laundering operation that John Cruz discovered soon after going to work for HSBC in Long Island. The bank was so involved in laundering dirty money from all over the world it had become a top-to-bottom operation involving many executives and employees. Budgets were drawn up with fines to the federal government included because the profits were just too massive to pass up.
The deeper John Cruz dug the worse it got, and he couldn't stay silent about the crimes being committed. His whistle blowing cost him his job and saw the bank clean house throughout the area and fire a raft of top employees throughout the New York area. Cruz and his family have been getting repeated death threats as he moves forward to shed more light on the crimes committed at HSBC.
His book, World Banking, World Fraud: Using Your Identity, lays out the whole story of this sordid affair and is only the first salvo in his campaign. Cruz's attorney will soon be filing claims for whistle blowing compensation with the Securities and Exchange Commission. His website has been getting hits from all over the world and his email box is full of words of support or further tales of financial fraud in the government, banks or on Wall Street.
Below are two articles this HSBC Fraud:
LONDON—HSBC Holdings PLC was slapped with the biggest retail-banking fine ever levied by the U.K. Financial Services Authority after the regulator found it sold elderly customers products that weren't suitable for them.
HSBC must pay a fine of £10.5 million ($16.4 million) as well as a further £29.3 million to compensate customers who were advised to buy bonds that often matured later than the buyer's life expectancy.
The roughly £285 million in investments, advised for purchase by HSBC subsidiary NHFA Ltd., were meant to fund nursing home and other medical costs for customers about to enter or already in long-term care. They typically had a five-year investment period.
Up to 2,485 customers who bought the investments between 2005 and 2010 may have received poor advice based on their individual circumstances, the U.K. regulator said.
HSBC identified the problems in 2009 and reported them to the FSA. Without the bank's agreement to settle at an early stage in the investigation, the fine would have been 30% higher, the FSA said.
"NHFA was trusted by its vulnerable and elderly customers. It breached that trust to sell them unsuitable products. This type of behavior undermines confidence in the financial services sector," said Tracey McDermott, the FSA's acting director of enforcement and financial crime.
The failings included selling products to customers whose life expectancy was less than the investment period, arranging high levels of withdrawals near the start of the investments that eroded capital, and not being consistent in assessing customers' attitude to investment risk.
Brian Robertson, chief executive of HSBC Bank PLC, said the incident "runs contrary to everything that we stand for."
"We are undertaking a full review of the advice given to impacted customers and I can guarantee that every customer who is found to have not been treated fairly will not be disadvantaged," Mr. Robertson said.
A spokesman for HSBC said the issue involved only a small number of NHFA advisers who weren't employed by HSBC.
ST. LOUIS, May 5 (Thomson Reuters Accelus) - The Justice Department's money-laundering probe against banking giant HSBC Holdings Plc is looking at possible prosecution of individual bankers, a source close to the investigation said on Thursday.
The source, who has direct knowledge of the probe which was disclosed last year, said it is moving slowly in part because of the close examination for potential individual prosecutions. He did not name any targeted individuals.
"I understand they are meticulously doing interviews with one primary objective driven by the Justice Department on this case, which is to identify and prosecute any individuals within the bank for which the evidence will support such an action. Prosecuting individuals is their number one priority," the source said on condition of anonymity.
The Justice Department probe is linked to bulk cash the bank received from money-changing firms in Mexico, the source said. The concern is that the bank may have handled money belonging to the Mexican drug cartels.
HSBC spokesman Rob Sherman declined to comment on the status of the investigations. "As we've indicated in our filings, we are subject to certain investigations by government authorities. In all cases, we're cooperating and seeking to resolve these matters," Sherman said.
Justice Department spokeswoman Laura Sweeney declined to comment.
The Justice Department was heavily criticized last August after reaching a deal to allow Barclays Bank to settle charges that it violated U.S. sanctions laws by forfeiting $298 million. While the federal judge overseeing the case ultimately approved the pact, he first dubbed it a "sweetheart deal" and questioned why the bank officials responsible were not held to account.
The judge's comments reflected a growing concern, on Capitol Hill and elsewhere, that banks found to have violated U.S. money laundering or sanctions laws can absolve themselves by simply writing a check. The concern is that such a system makes these payments a cost of doing business and does not deter such crimes.
In October, a group of federal regulators disclosed enforcement actions against HSBC North American Holdings Inc. and HSBC Bank USA. The regulators obliged the bank to improve its compliance risk-management program, including its anti-money laundering compliance regime, but did not at the time issue a fine.
One of the regulators involved, the Office of the Comptroller of the Currency, stated that the bank "had deficiencies with respect to suspicious activity reporting, monitoring of bulk cash purchases and international funds transfers, customer due diligence concerning its foreign affiliates, and risk assessment with respect to politically-exposed persons and their associates."
The regulatory order came after U.S. Senator Carl Levin said in February 2010 he was referring HSBC Holdings to its U.S. bank regulator in connection with questionable accounts it provided for senior Angolan officials.
Levin, chairman of the Permanent Subcommittee on Investigations, said he was referring the issue to the Office of the Comptroller of the Currency, an arm of the U.S. Treasury, because he was concerned that tainted foreign money might be flowing into the United States.
It is not known whether the Angolan concerns were also under scrutiny in the Justice Department probe.
HSBC exited the global banknotes business last year and said it had taken steps to improve its anti-money laundering compliance regime.
In a November filing with the Securities and Exchange Commission, HSBC stated that it remained "the subject of ongoing inquiries, including grand jury subpoenas and other requests for information, by government agencies, including the US Attorney's Office and the U.S. Department of Justice.
About John Cruz
John Cruz worked his way up the corporate banking ladder from a small Credit Union (where he should have stayed) to HSBC only to learn that sometimes telling the truth and upholding the law can ruin your life.
When Cruz began discovering money laundering, bank fraud and identity theft at HSBC his American Dream was over. World Banking World Fraud is an insider's story that exposes how an international bank launders money and covers its tracks. WBWF exposes the truth of how banks like this destroy their own employees who get too close to the truth and protect themselves from the United States government.
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