Banking giant accused of laundering billions
Ex-employee in New York has 1,000 pages of customer account recordsPublished: 02/01/2012 at 8:39 PM
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NEW YORK – A former employee of HSBC in New York has 1,000 pages of customer account records he claims are evidence of an international money-laundering scheme involving hundreds of billions of dollars by the global banking giant, which reportedly is under investigation by a U.S. Senate committee.
John Cruz has delivered to WND customer account records he says he pulled from the HSBC computer system before he was fired. Cruz was terminated Feb. 17, 2010, after two years at HSBC for “poor performance,” but he contends he was let go because senior management didn’t want to him to pursue his personal investigation.
Asked for comment, HSBC spokesman Rob Sherman issued a statement to WND.
“We support efforts to protect the integrity of the financial system, and our commitment to AML (anti-money laundering) includes rigorous internal processes and a close working partnership with regulators and law enforcement,” the statement said.
One of the largest banks in the world, London-based HSBC has about 7,500 offices in more than 80 countries and territories in Europe, North and South America, the Asia-Pacific region, the Middle East and Africa.
In his position as an account relationship manager, Cruz worked in the HSBC southern New York region, which accounts for about 50 percent of HSBC’s North American revenue. He was assigned to work with several branch managers to identify accounts in which HSBC might introduce additional banking services.
Cruz told WND he has “firsthand knowledge and proof of how HSBC transferred billions of dollars through accounts linked to companies that did not exist.”
“I had poor job performance because the portfolio of HSBC accounts I was given to work ended up being 90 percent fictitious and fraudulent accounts,” he said. “How could I expand HSBC bank relations with fraudulent accounts that were created to be used for illegal money laundering?”
Meanwhile, the Senate Permanent Subcommittee on Investigations has begun probing money-laundering activity at HSBC, according to a Reuters report last week, with the intention of scheduling hearings in the spring.
Elise Bean, chief legal counsel and majority staff director for the Senate subcommittee, told WND the panel has “no comment” on any possible HSBC investigation.
Cruz came to WND with the 1,000 pages of evidence before the committee’s investigation of HSBC was reported.
He previously brought his complaint to Jeremy Scileppi, bureau chief of the Suffolk County District Attorney’s office on Long Island.
“Scileppi was no more interested in hearing what I had to say than was the HSBC senior bank management,” Cruz said. “I got stonewalled. That’s when I decided to write a book.”
Titled “World Banking World Fraud: Using Your Identity,” the book was published Oct. 7, 2011.
Scileppi and the Suffolk County District Attorney’s office did not respond to a WND request to confirm Cruz’s claim.
Cruz said that in the two years he worked for HSBC, he eventually discovered that money laundering was being carried out not only by branch managers but also by senior officers of the bank, both within the U.S. and internationally.
“From what I saw, I came to suspect HSBC had become the Mexican drug cartels’ bank of choice,” he said.
The customer account records suggest identity theft was used to capture legitimate Social Security numbers and create bogus retail and commercial bank accounts through which HSBC employees could deposit and withdraw hundreds of millions of dollars on a daily basis, apparently without the knowledge of the identity-theft victims.
Cruz said he ultimately was fired after his supervisors made numerous attempts to discourage him from pursuing his personal investigation.
“When I began bringing to the attention of my supervisors suspicious activity in accounts that needed to be reported to legal authorities, including the U.S. Department of Homeland Security, I was told to shut up,” he said.
His job required him to access the HSBC computer system to find accounts to contact and visit in person.
“I was shocked to find accounts through which millions of dollars were being deposited and withdrawn without any apparent business activity being conducted,” he said. “Then when I went to visit the business, I found nothing – shell companies, vacant offices with no furniture, or no such business whatsoever at the address listed on the account records.”
Cruz said he never imagined that keeping his job at HSBC would mean turning a blind eye to criminal behavior.
“I always thought that if you ran a bank, you would keep away from customers with fake names,” he said. “Instead, what I found at HSBC were thousands of accounts established for phantom businesses that had apparently only thousands of dollars of claimed business each year, but millions of dollars flowing into and out of the accounts every month.”
One of Cruz’s first calls on an HSBC customer required a drive east on the Long Island Expressway to visit a small insurance company. But the phone number turned out to be disconnected, and the tax ID number corresponded with another HSBC customer from Yonkers who had recently closed his account with the bank.
Another business Cruz visited, near the Brentwood Station on the Long Island Rail Way off Suffolk Avenue, turned out to be an abandoned building that evidently had not been occupied in some time. It had broken windows, and weeds pushed up through the cracked cement in the parking lot.
WND has contacted HSBC customers identified in the account records. They appeared to fall into several distinct categories, including former customers of the bank who claim to have closed their accounts and people with no HSBC account history who were independently victims of identity theft related to credit card use.
In all cases WND investigated, the Social Security numbers used to open the HSBC accounts were legitimate and connected to the person in whose name the retail or commercial bank account was opened.
In most cases, WND found the phone numbers listed with the HSBC accounts to be disconnected or assigned to new users who claimed no knowledge of the accounts.