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Huge Fines: HSBC, Standard Chartered Bank Laundered Money for Drug Cartels, Iran

Two British banks, HSBC and Standard Chartered Bank, have agreed to pay enormous fines after being accused of laundering money to drug cartels as well as terrorist states and organizations.

The banks will pay enormous fines, but there will be no criminal prosecutions -- as there would be if these transactions were done by invididuals.

HSBC will pay $1.9 billion to settle a money-laundering probe by U.S. federal and state authorities, reports CBS News. The financial institution was in violation of the Bank Secrecy Act and the Trading With the Enemy Act.

The U.S. probe found transfers of billions of dollars on behalf of nations such as Iran, which is under international sanctions, and is often believed to funnel money to such groups as Hamas. There were also transfers through HSBC's U.S. division by Mexican drug cartels.

Last summer, a Senate investigation concluded that HSBC's lax rules exposed it to money laundering and terrorist financing.

HSBC also provided money and services to banks in Saudi Arabia and Bangladesh that may have helped fund al Qaeda and other terrorist groups, according to the Senate investigation.

Stuart Gulliver, Group Chief Executive of HSBC, said in a statement: "We accept responsibility for our past mistakes. We have said we are profoundly sorry for them, and we do so again."

Sen. Carl Levin (D-Mich) recalled several times when HSBC promised to fix problems in the past after being sanctioned by regulators, but failed to do so.

Standard Chartered Bank agreed to pay $340 million to settle allegations that it was scheming with the Iranian government to launder billions of dollars.

Standard Chartered Bank, between January 2001 and 2010, had 60,000 transactions through its New York branch that were subject to U.S. economic sanctions and then covered up, reports CBS News.

The banks where the money was transferred include the Central Bank of Iran, as well as Bank Saderat and Bank Melli, which are also owned by Iran.

The U.S. government suspects Iran was financing terrorist groups such as Hezbollah, Hamas and the Palestinian Islamic Jihad through its banks.


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