His bosses ridiculed him and told him to shut up. Law enforcement officials ignored him. But with overwhelming evidence of international banking fraud in the millions, perhaps billions, of dollars staring him in the face, HSBC manager John Cruz knew he had to act, even if it cost him his job. It did; but Cruz’s charges against the global banking giant have borne out in the wake of a damning Senate investigation and a record $1.92 billion fine by federal authorities.
For his courage and sacrifice in pursuit of justice, WND has named Cruz “Whistleblower of the Year.”
After being ignored by law enforcement authorities since 2009, Cruz brought to WND approximately 1,000 pages of customer account records he obtained while working as a relationship manager for HSBC in Long Island, N.Y.
Cruz’s records document a complex scheme in which HSBC employees, with the complicity of senior management, were laundering hundreds of millions of dollars through fictitious accounts created using the legitimate Social Security numbers of customers and former customers.
In the settlement announced Tuesday, the bank admitted to facilitating illicit financial transfers on behalf of Cuba, Iran, Sudan, Burma, Libya and the Mexican and Colombian drug cartels.
“I couldn’t get anyone to pay any attention to the evidence I had, not even local or federal law enforcement authorities, until WND started publishing my story,” Cruz said.
“Nothing happened until WND made public the customer account records and taped interviews with multiple bank officers, including senior management and bank security officers,” he added.
He pointed out that the Senate Permanent Subcommittee on Investigations and the Department of Justice “never mentioned money laundering for the Mexican drug cartels or the bank’s activities circumventing banking restrictions on Iran until after WND published the information I had and federal authorities were forced into action.”
As WND reported Tuesday, Cruz called the $1.92 billion fine the U.S. government imposed on HSBC “a joke” and filed a $10 million lawsuit for “retaliation and wrongful termination.”
Cruz, 47, born in Brooklyn, N.Y., was abandoned by his father at age 5, and his mother died when he was 7.
“I know firsthand what it’s like to work your way up from the bottom,” Cruz wrote in his autobiography, “World Banking World Fraud: Using Your Identity.”
When his mother died at age 27, she left behind five children, ranging in age from 1 to 9. Cruz was raised by his grandparents, who lived on welfare in a shack on Long Island that was overrun by the junkyard business his grandfather ran on the side.
“When I first moved in with them, my grandfather put me to work scrapping cars, which took up most of my time during school days,” Cruz chronicled. “Now, I hardly ever went to school. Whenever I did, I got into fights. The other kids made fun of me because I was rarely bathed, I smelled, and my clothes all came from the Salvation Army.”
See WND’s two-part interview with John Cruz:
At 12 years old, after welfare officers, assisted by truant officers, threatened to cut off the grandparents’ money unless Cruz went to school, he moved upstate to Constable, N.Y., near the Canadian border. He lived there with a relative who forced him to sell marijuana in Moriches on Long Island.
After graduating from high school in 1981, Cruz enlisted in the U.S. Army as an infantryman.
“But the Army was not the experience I was searching for,” he admitted. “I learned many things and got shipped around the country to different bases, but my days were spent mostly in drudgery and I was bored. I was honorably discharged after fulfilling the time required of me.”
Through perseverance and the grace of God, Cruz said, he managed to graduate from Dowling College in Oakdale, N.Y., in 1990, with a BA in accounting.
From there, he accepted a job in a federal credit union, an experience he felt prepared him for the more challenging environment of commercial banking.
“I am not a crusader,” Cruz explained in his autobiography. “I got into banking so I could make money. And I moved to HSBC so I could make more money.
“My move to HSBC was one of the largest in my career, though not as large as my jump from a farm upstate to the armed forces and college,” he wrote. “Nevertheless, when I left the old credit union for this multinational, I more than doubled my salary. Even the benefits were better, and it seemed like just a matter of time before I moved up the ladder as I had moved up every other ladder.”
A matter of conscience
Cruz explained to WND that taking a job with HSBC in January 2008 ended up being one of the major disappointments in his life.
What angered him most was that the bank used his name to perpetrate the fraudulent banking activities he ultimately blew the whistle on.
Cruz ultimately was fired after his supervisors made numerous attempts to discourage him from pursuing what turned out to be his personal investigation into HSBC money-laundering activity.
“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,” Cruz 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 never imagined that holding his job at HSBC would require turning a blind eye to criminal behavior.
Cruz told WND he reported the suspicious bank activity he encountered to his immediate supervisor, to 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 account activity.
“My conclusion was that HSBC was not going to do anything about the suspicious account activity I discovered, 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.
‘I had to be wired to protect myself’
“Personally, I think anyone who works at HSBC and does not have with them a concealed personal recording device at all times is crazy,” Cruz explained to WND. “At HSBC, I concluded I had to be wired to protect myself.”
He became so frustrated at being stonewalled in his attempts to make public his evidence that he began taping even his conversations with federal law enforcement officials.
He 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 insists the breakthrough in the HSBC case occurred when WND began publishing his story in February.
“WND has been great,” Cruz said. “WND is the first and only news agency to put my story on the air, to put my story on the Web, to get my story out to people.”
On Wednesday, Cruz explained to Lou Dobbs on the Fox Business Network that his lawyers were now in the process of determining what portion of the $1.92 billion HSBC settlement the federal government plans to share with him as the whistleblower who first brought public evidence of the illegal banking activities for which HSBC was fined.
In response to WND’s reporting earlier this year of Cruz’s evidence, HSBC lodged a complaint that blocked Internet access to one of the WND stories, and senior reporter Jerome Corsi was fired by the New York City investment firm he had worked with for two years as a senior managing director, Gilford Securities.
In June, WND reported evidence Eric Holder’s Justice Department has not investigated money-laundering charges in deference to bank clients of his Washington-based law firm, where Holder was a partner prior to joining the Obama administration.
WND reported in October HSBC was engaged in a systematic scheme to defraud citizens of India who live abroad out of billion of dollars in investment accounts, according to an Indian source who provided evidence.