Courtesy of Mish.
An interesting Video Interview With Whistleblower Everett Stern just came my way.
In case you don’t recognize the name, Stern disclosed the money laundering activities of HSBC, for which the bank was fined $1.9 billion. Chump change says Stern, who claims he was placed in the fraud detection unit (along with everyone else) precisely because they knew nothing about money laundering.
So how did Stern catch the activity? He read a couple of books and a few weeks later discovered money laundering activity, lots of it.
Moreover, Stern had proof it was purposeful, organized fraud as opposed to transactions just slipping through the cracks.
Partial Transcript
Here is a key snip of the transcript and interview of Everett Stern by Sophie Shevardnadze.
SS: But, technically, how did you detect it technically? How does it happen? How did you detect suspicious transaction that could be linked to terrorism or drug cartels?
ES: It was so obvious. It’s because I have two brain cells in my brain and can do simple internet Google searches. This was not rocket science. For instance OFEC has a list of companies that the US cannot do business with, an OFEC sanction list, and so, for instance, Caribe Supermarkets, Tajco, the Tajideen Brothers, which were all linked to Hezbollah. Caribe Supermarkets is a supermarket chain based out in Gambia, and they are owned by Tajco, which is owned by Tajideen Brothers, which are based out in Beirut, and are financiers of Hezbollah. There were transactions going through HSBC and I saw it.
ES: What’s interesting is that it’s not that it was hard to find the transactions, it was very easy. The real disturbing part is how they were doing it because these transactions, that were supposed to be stopped in the wire filter, were actually going through. They were going through because what HSBC employees were doing was adding dots and dashes and different numeric codings to the actual payments. The FBI later called it “stripping the payments”. So the computer system…there wasn’t a match with the transactions and they would go through. It was just blatantly obvious what they were doing, it just took me I guess just little extra effort to see how they were criminally allowing the terrorist funds to go through.
Mish Comment: No one went to jail over this. I am not even aware that anyone was criminally charged. Here is another snip to consider. Subsequent emphasis in italics is mine.
SS: If we abstract from the HSBC case, who is ultimately in charge of preventing money laundering in the US? Are they doing their job or does it have to be individuals like you who would actually step up?
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