Law-enforcement authorities sat on a major bank’s money-laundering allegations, even denying they were handed the same information by a whistleblower, until the story was exposed by WND.
In a video interview, whistleblower John Cruz, a former vice president and relationship manager for HSBC in New York, detailed how he turned over his information on the bank to authorities. He named Frank J. DiGregorio, a detective sergeant in the office of the Queens County District Attorney, and Graham R. Klein, special agent at the U.S. Department of Homeland Security.
Cruz has delivered to WND about 1,000 pages of customer-account records documenting hundreds of millions of dollars in suspicious transactions he pulled from the HSBC computer system. He says he was fired by HSBC after senior management showed no interest in investigating his claims.
“Back in 2010, my attorney turned over information regarding HSBC to DiGregorio,” Cruz affirmed. “Then, on Feb 7, 2012, Homeland Security said my attorneys never spoke to them, that they didn’t know who I am.”
Cruz said he was shocked.
“DiGregorio called me, he was belittling me,” Cruz recounted. “DiGregorio said I was a disgruntled employee, that I was just here for the money. They said, ‘Why did it take you two years to come forward?’”
After presenting DHS with documentation his lawyers had presented to the agency two years earlier, Cruz challenged DiGregorio and Klein: “Why did it take you two years to get back to me?”
“I told them they had this information two years ago, and the only reason they were getting back to me now was because of the article WND published about HSBC money laundering,” Cruz said.
He explained that DHS on Feb. 7 promised it would get back to him in two weeks, yet he is still waiting to hear back.
Di Gregorio acknowledged to WND that Cruz has turned over his documentary information to DHS.
“This is an on-going investigation,” DiGregorio said. “Cruz made very serious allegations, and it takes time for us to do our work. But we have not forgotten about Cruz, and we will get back to him just as soon as we can.”
DiGregorio explained that as a detective sergeant in the Queens County District Attorney’s Office, he is currently assigned to Homeland Security Investigations, where he supervises Special Agent Klein.
As such, DiGregorio indicated he was speaking on the record on behalf of Klein as well.
WND has met separately with DiGregorio and Klein and turned over to DHS, with Cruz’s permission, all materials in its possession relating to allegations Cruz has made against HSBC.
Cruz contacts IRS
Cruz said he has also contacted the Internal Revenue Service, where he spoke with Special Agent David Wagner and Kevin B. Sophia, supervisory special agent. Both are with the U.S. Department of Treasury, IRS, Criminal Investigation Division.
Cruz said he met with the agents at the IRS office in Denver April 12 and gave them a computer disc with all of the HSBC documents.
According to Cruz, Sophia asked, “What would make us believe HSBC employees would acknowledge illegal activity?”
Cruz said: “I told them I recorded everything.”
Cruz also handed over to the IRS two discs with approximately 19 to 20 hours he had recorded of his discussions with HSBC employees concerning his allegations.
Cruz told WND the IRS agents were overwhelmed with the volume and detail of the information he handed over.
“The IRS agents said, ‘This is mind-boggling,’” Cruz recounted.
“They told me that if the information on the computer disk and in the audio files was as I represented, the IRS agents were talking about arresting HSBC bank employees.”
Cruz noted the IRS agents were stunned at the dollar magnitude of the suspicious bank transactions he had documented, noting that billions of dollars in tax revenue was being lost, with bank employees transferring money into and out of bogus accounts set up for illegal gain.
The IRS explained to Cruz that the individuals whose identities may have been stolen to set up the apparently fraudulent accounts would also have to be investigated, to see if they were part of the suspicious activity or mere victims.
Either way, the Social Security numbers associated with the suspicious HSBC accounts turned out to be authentic numbers identified in many cases with present or former customers of the bank. The billions of dollars following through the accounts had never been reported for income tax purposes.
Cruz wiretaps DHS and IRS
Cruz handed over to WND audio recordings of his meetings with DHS and IRS officials that he made without disclosing he was secretly taping the conversations.
Cruz explained that he no longer trusts even federal law enforcement to do their job investigating and prosecuting HSBC employees who may be involved in illegal bank transactions, as he alleges.
“It’s a circle,” Cruz explained. “I turn over the information to law enforcement, and law enforcement turns around and gives the information right back to the bank for the bank to conduct their own internal investigation.”
Cruz maintained he was fired by HSBC for bringing forth his charges.
“This is how the bank and employees in the bank make money,” he argued, explaining why he was fired instead of being given awards for meritorious service disclosing the suspicious activities. “It’s a lot easier to make money off fraudulent transactions than it is to make money off legal transactions.”
He indicated he was not concerned HSBC or its employees might sue him for libel or defamation.
“Sue me,” he said defiantly, “sue me all you want. Then bring out the proof. I will ask for every document. I will ask for a lot of documents. I will show that I am right, and I will give every tape recording to the public on air, so they can listen to these individuals talking.”
Cruz explained he taped the conversations with federal law enforcement authorities “to cover myself.”
“You never know what’s going to happen,” he explained. “Somebody could say, ‘Oh, you’re involved.’ I need to explain that I’m not involved, but that I reported it. Then, if they deny I reported it, I have the tapes to prove I reported it.”
WND pointed out to Cruz that he was accusing by name federal officials in DHS and IRS, as well as officials in the district attorneys offices in Suffolk County and Queens County, New York, of not taking steps to stop immediately what he alleges is money laundering on a massive scale involving billions of dollars in the United States around the world.
Cruz affirmed that this was correct, noting that his contact with the IRS was relatively recent and he has reason to believe the IRS has opened an investigation.
IRS agents Wagner and Sophia did not return WND calls for comment.
Cruz handed over to WND audio copies of the recordings he made in his meetings with DHS and the IRS special agents.
Concerned about his safety, Cruz also requested WND turn over to an independent law enforcement agency of WND’s choosing the 1,000 pages of documents and the various audio copies of meetings he held with federal officials as well as HSBC bank management and security personnel.
With Cruz’s consent, WND turned over the relevant information to the Cold Case Posse in the Arizona Maricopa County Sheriff’s Office of Sheriff Joe Arpaio.
Even though Cruz’s information does not necessarily fall within the jurisdiction of the MCSO, Arpaio’s team agreed to accept Cruz’s information into evidence for safekeeping.
HSBC ‘a criminal organization’
Cruz began working at HSBC on Jan. 14, 2008, and was terminated for “poor job performance” on Feb. 17, 2010.
In his position as a vice president and a senior account relationship manager in New York, Cruz worked in a region that accounts for approximately 50 percent of HSBC’s North American revenue. He was assigned to work with several branch managers to identify accounts where HSBC might introduce additional banking services.
Cruz told WND he recorded hundreds of hours of meetings he conducted with HSBC management and bank security personnel during which he charged various bank managers were engaging in criminal acts.
“I have hours of hours of recordings, ranging from bank tellers, to business representatives, to branch managers, to executives,” he said. “The whole system is designed to be a culture of fraud to make it look like it’s a legal system. But it’s not.”
Cruz explained that after many repeated efforts, he gave up on the idea that HSBC senior management or bank security would pursue his allegations to investigate and stop the wrongdoing.
“My conclusion was that HSBC was not 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.
Yet, despite repeated attempts to bring the information to the attention of law enforcement officers, Cruz hit a brick wall until WND examined his documentation and determined his allegations, although shocking, were sufficiently substantiated to merit publication.
“HSBC is a criminal organization,” he stressed. “It is a culture of crime.”
Cruz made his charges public in a book published last year titled “World Banking World Fraud: Using Your Identity.”