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Big bank caught again with fraudulent accounts

The global bank that avoided U.S. Justice Department prosecution for harboring accounts for global terrorists and drug cartels by paying a fine of $1.9 billion is in the news again for allowing a fraudulent account.

The Daily Telegraph of London reported HSBC refunded to a couple 4,000 British pounds, about $5,300, that had been stolen by an eBay fraudster.

The paper said HSBC refused to explain why it made the refund, but experts suggested it might have been because the bank realized the criminal’s account should “never have existed.”

The paper said that in similar circumstances, other banks used by fraudsters have refused refunds, illustrating the inconsistent approach to fraud in the banking sector.

The Telegraph said last month two scam victims had been refused refunds from the criminals’ banks, despite police reports showing that the accounts had been opened using false details.

In 2012, a series of WND investigative reports helped expose the HSBC money-laundering scheme. WND reported the charges of former HSBC manager John Cruz, who provided WND with 1,000 pages of customer account records along with audio recordings that provided evidence of an international money-laundering scheme by the bank.

When Loretta Lynch was nominated in 2015 by President Obama for attorney general, the Senate delayed her confirmation vote amid concern over her handling of HSBC, among other issues. She signed a “deferred prosecution agreement” in December 2012 in which the bank paid a $1.9 billion fine in return for the U.S. Department of Justice agreeing not to bring criminal charges.

Loretta Lynch is sworn in before testifying during her confirmation hearing before the Senate Judiciary Committee Jan. 28, 2015.

Lynch later admitted to the Senate Judiciary Committee, as WND reported in March 2015, that her investigators in the probe of HSBC were aware of evidence compiled by Cruz but she chose, nevertheless, not to bring criminal charges.

Read the backstory inside the HSBC scandal – how WND first exposed the massive money-laundering scheme and the fallout from the discovery.

Funding jihadists, drug cartels

In its initial HSBC story, Feb. 1, 2012, WND obtained evidence that bank employees in Long Island were stealing the Social Security numbers of former depositors to create bogus “pass-through” accounts used to launder hundreds of millions of dollars for criminal enterprises such as Mexican drug cartels and Islamic terrorists.

One of the largest banks in the world, London-based HSBC has about 7,500 offices in more than 80 countries and territories in Europe, North and South America, the Asia-Pacific region, the Middle East and Africa.

WND reported in February 2015 Cruz told Senate Judiciary Committee staff preparing for the Lynch confirmation hearings that he considered the $1.9 billion fine DOJ imposed on HSBC in 2012 in lieu of criminal prosecution “a joke.”

Cruz argued that a $1.9 billion fine of an international bank the size of HSBC amounted to no more than “a few days operating profit.” He described it as “a cost of doing business” once HSBC had decided to launder money for international criminals.

Lynch later admitted HSBC was not complying with the deferred prosecution agreement she signed for the Justice Department, apparently confirming whistleblower suspicions that the bank was continuing to launder money for Mexican drug cartels and international terrorist organizations.

“I’m confident HSBC never quit money-laundering despite the Department of Justice settlement in December 2012,” Cruz told WND in February 2015.

He said he found out from some of his friends at the bank that some of the employees who had been involved in the money laundering before he was fired were still there.

Here is WND’s history of coverage of the HSBC scandal: