Deferred Prosecution for Big Banks Involved in the "Drug War": Lenders Face Few Consequences for Violating Anti-Money Laundering Laws

From [HERE] Citigroup, JP Morgan Chase & Co., Wachovia (acquired by Wells Fargo in 2009), HSBC Holdings, ING Bank, Standard Chartered, American Express Bank International, and not a few others, have a common bond beyond ranking among the largest banks in the world.

All have been accused within the past five years (and several this year) of failing to comply with US anti-money laundering laws — thereby enabling, collectively, hundreds of billions of dollars worth of suspicious transactions to move through the banking system absent adequate monitoring or oversight.

Yet not one these banks, nor any of their top executives, has been hit with criminal sanctions.

All, with the exception of Britain’s HSBC  (which is still under investigation), have agreed to pay fines for their alleged transgressions after being served cease-and-desist orders or have entered into so-called deferred-prosecution pacts — under which a lender agrees to pay a fine and to comply with the law going foward in exchange for dismissal of all charges at the end of a specified government monitoring period.

But again, not one bank has been charged with a crime nor have any top executives been forced to do the perp walk, bound by handcuffs, in front of the adoring media throng.

Imagine if you or I were pulled over by the cops while transporting in the trunk of our car even $10,000 in bills that traced back to individuals suspected of being involved in illegal activities, such as narco-trafficking. What are the odds that we would walk away with only a traffic ticket?

That’s essentially what is happening in these cases involving big banks, who, for all practical purposes, are allowing their money transportation systems to be rented, for a fee, by criminals, while the banks’ leadership pleads ignorance: “I didn’t know that money was in the trunk. I’ll have to look into that.”

Now, if you take that same $10,000, or even millions of dollars, and put it inside an armored car under contract to a big bank, suddenly the dirty money gains the presumption of legitimate commerce, and is likely to have a police escort as opposed to being subjected to a police inspection.

“All financial crime has a money laundering component,” says Charles A. Intriago, president of the Miami-based Association of Certified Financial Crime Specialists. “… If you’re an individual, and get caught, you get hammered.

“But if you’re a big bank, and you’re caught moving money for a terrorist or drug dealer, you don’t have to worry. You just fork over a monetary penalty, and then raise your fees to make up for it.

“Until we see bankers walking off in handcuffs to face charges in these cases, nothing is going to change,” Intriago adds. “These monetary penalties are just a cost of doing business to them, like paying for a new corporate jet.”