NEW YORK – A former employee of one of the world’s largest international banks has provided WND with more than 1,000 pages of documents, including customer account ledgers for dozens of companies through which the financial institution was laundering money each month, according to the whistleblower.
“I found many accounts through which hundreds of thousands of dollars were being flowed as a conduit on a monthly basis,” John Cruz, an account relationship manager who worked in the HSBC southern New York region. told WND.
As WND reported, Cruz has a raft of customer account records he claims are evidence of an international money-laundering scheme involving hundreds of billions of dollars by London-based HSBC, which reportedly is under investigation by a U.S. Senate committee.
To illustrate the point, WND and Cruz selected the bank checking account ledger for a particular HSBC commercial account, called “Company ABC” for the sake of this article, for the months May through August 2009.
In the exhibits below, WND has redacted all information that might be used to identify the account holder, including removing the account number from the bank statements.
Company ABC was identified in HSBC records with the following information:
- “Delivery Service, DHL, office products, packages.”
- Located on West 39th Street in New York City, in operation for four years and organized under New York corporate laws.
- The account was identified as being 100 percent owned by a person from Malaysia who had non-resident status in the United States and a permanent address in West Hempstead, N.Y.
- The account registration was deficient in any meaningful “Know Your Customer” information, expect to list for the owner a New York drivers’ license number.
- The file described the business as: “SHIPPING COMPANY, OFFICE ON THE 9TH FLOOR, EMPLOYEES, DESKS, COMPUTERS, PRESIDENT’S OFFICE, OPERATIONS ON 13TH FLOOR.”
- The file noted that the business was last paid a site visit on March 10, 2009, by the HSBC branch manager in E. Northport, Long Island.
- The file listed the annual revenue of the company as $2 million. But also lists the gross for the 2008 tax return as $2,782,857.
“The first words out of my mouth when I first visited Company ABC in person were that this company is bogus,” Cruz said. “There were a few small boxes lying around and a few envelopes – but nothing of value, no large packages or anything else that would justify hundreds of thousands of dollars of business being transacted here on a monthly basis.”
Cruz said he found two women on Company ABC’s 13th floor, but they seemed to be only sitting at desks and talking.
“It turned out that the two women did not speak English,” he said. “So, when I said, ‘Hello,’ they just nodded. There were no managers or other employees around, so I left.”
As seen in Exhibit 1, for the month from May 7, 2009, through June 5, 2009, Company ABC started with an opening balance of $628,081.74 and a closing balance of $328,228.99.
On May 15, 2009, a debit reflects that $300,100 was wired from the account to an unspecified location via a telephone transfer.
Other than to be credited $247.25 on May 28, 2009, the account shows no other activity.
“This was typical for Company ABC,” Cruz noted. “Each month, large sums were transferred in and transferred out of the account in even amounts, without any way of being able to determine the source of the funds transferred in or the destination of the funds being transferred out.”
Exhibit 2 demonstrates a similar pattern.
In the month June 5, 2009 through July 7, 2009, two online transfers were debited from the account: one in the amount of $85,000 on June 9, 2009, and the other in the amount of $243,228.99 on June 26, 2009.
A $500,000 credit was transferred online into the account on June 29, 2009.
In effect, the beginning balance of $328,228.99 at the start of the month was wired out in the two debit transactions, with the account balance hitting zero after the second transfer-out was completed.
The account ended the month with a balance of $500,000 – the amount that was wired into the account after the account balance hit zero.
Exhibit 3 documents in the month July 7, 2009, through Aug. 7, 2009, the $500.000 balance that remained at the end of the previous month was reduced by one transaciton, an online debit transfer amounting to $200,000.
Exhibit 4, covering the month Aug. 7, 2009 through Sept. 8, 2009, continues the pattern of large wire tranfer debits and credits, with one online tranfer out of the account – $100,000 on Aug. 10, 2009 – and two online transfers into the account: $30,000 on Aug. 31, 2009, and $100,000 on the same day.
Cruz noted the “pattern of large sums of money being transferred into and out of the account typically in even numbers is very suspicious.”
“The amounts transferred do not appear to relate to any shipping business that I could document the company was doing,” he said. “Nor do I have any idea where the money transferred into the account came from, or where the money transferred out of the account went to.”
Cruz said he reported the account as suspicious to his immediate supervisor, the business segment leader in his region, and to senior bank security.
“I believed we had the responsibility under banking and anti-money-laundering laws to file a suspicious activity report on this account with the U.S. Department of Homeland Security,” he continued.
“My supervisor ridiculed me for thinking the account was suspicious, and the senior bank security officer said he was prevented by executive senior management of the bank from doing anything about accounts like this.”
Cruz recorded his conversations with his immediate supervisor, the bank segment leader, and the senior bank security officer to whom he brought his concerns about suspicious activity he documented in the Company ABC checking account.
Before and after reporting his concerns about Company ABC, Cruz printed from the HSBC computer system hard paper copies of the company’s monthly checking account activity.
“My conclusion was that HSBC wasn’t going to do anything about this account because HSBC management from the branch level, to senior bank security, to executive senior management was involved in the illegal activity I found,” he said.
“Personally, I think anyone who works at HSBC and does not have with them a concealed personal recording device at all times is crazy. At HSBC, I concluded I had to be wired to protect myself.”