Financial Crime Expert Consultant
The banking criminals exposed.
Jesus College, Cambridge hosted, once more, the world’s leading Symposium on Economic Crime, and over 500 distinguished speakers and panellists drawn from the widest possible international fora, gathered to make presentations to the many hundreds of delegates and attendees.
This Symposium has indeed become an icon among other international gatherings of its knd and over the years, it has proved to be highly influential in the driving and development of international policy aimed at combating international financial and economic crime.
What became very quickly clear this year was the general sense of deep disgust and repugnance that was demonstrated towards the global banking industry.
I can say with some degree of certainty now that a very large number of academics, law enforcement agencies, and financial compliance consultants are now joined, as one, in their total condemnation of significant elements of the global banking sector for their organised criminal activities.
Many banks are widely identified now as nothing more than enterprise criminal organisations, who engage in widespread criminal practice and dishonest conduct as a matter of course and deliberate commercial policy.
Speaker after speaker addressed the implications of the scandalous level of PPI fraud, whose repayment and compensation schedules now run into billions of pounds.
Some speakers struggled with the definition of such activity as ‘Mis-selling’ and needed to be advised that what they were describing was an institutionalised level of organised financial crimes involving fraud, false accounting, forgery and other offences involving acts of misrepresentation and deceit.
One of the side issues which came out of this and other debates, was the general and genuine sense of bewilderment that management in these institutions concerned, (and very few banks and financial houses have escaped censure for this dishonest practice) have walked away from this orgy of criminal antics, completely unscathed. The protestations from management that these dishonest acts were carried out by a few rogue elements, holds no water and cannot be justified.
Similar exercises were carried out examining other forms of financial malfeasance, including Forex manipulation and specifically LIBOR criminality.
The latter area of wrongdoing was amplified and illuminated by the recent conviction of the broker Tom Hayes whose bizarre and dysfunctional behaviour at Southwark Crown Court, even while he was standing trial for his criminal wrongdoing became subject to discussion. His arrogance and the degree of contempt he demonstrated for prosecuting counsel and the jury was described as ‘truly breathtaking’
My colleague who attended the trial, described Hayes as appearing aghast that he should be standing in the dock, proving, as my friend said, how little he really understood of the moral standards which could and should be expected of people who trade in those markets that will have a strong impact on other people’s investments and savings, and described Hayes as possessing no moral or ethical dimension at all.
One workshop which I found particularly revealing, and from which I am still trying to extricate my emotions was the break-out session hosted by members of the SME Alliance.
This is an organisation made up of ordinary people who have had the misfortune to be defrauded out of millions of pounds by the major banks, and from whom they are seeking redress. Their excellent website, www.smealliance.org gives significant information about them and their campaigns.
I listened with mounting horror and a feeling of growing nausea, while examples of massive conspiracies to defraud small and medium size businesses were outlined in cryptic detail. Good honest (but possibly unsophisticated) businessmen being inveigled into commercial relationships with banks, at the same time as seeking commercial lending to enhance and develop their already successful businesses.
Particularly nauseating was evidence of the criminal defrauding (I refuse to use the weasel words ‘mis-selling’) achieved through the use of little-understood and unwanted derivative instruments.
In the end, I sat there, open-mouthed while evidence against the same old usual scum-bag financial institutions, was unrolled, and a lengthy list of agencies, all apparently dedicated to dealing with fraud and financial crime, lamely sought to explain why they were powerless to help these victims.
This was followed by a lengthy list of names of major law firms, and Big 5 accounting firms who were willing to join with these pariah banks to bring complex and expensive legal actions against these victims, bankrupting them, forcing them from their homes, repossessing properties they had worked for years to create, while all the time, the regulators and the other agencies, including to my shame and regret, certain spineless police forces, stood by and sought to justify their inaction.
At one stage, we were shown how banks ritually and deliberately take transcripts of telephone calls made between complainants and the bank, and deliberately and systematically go through these conversations, re-editing them and reproducing them in a format which is much more favourable to the bank.
I mean, occasionally it can be difficult to interpret a specific word or even part of a sentence uttered on a bad telephone line, but this was evidence of routine re-editing that had gone on, page after page after page, suppressing conversation which put the bank in a bad or critical light, and purporting to be documentary evidence as to the truth of a conversation.
These documents were blatant forgeries, and at one point, not being able to remain quiet any longer, I burst out in my anger ‘These are nothing but downright forgeries, and these people have uttered them’.
These documents had been used against these victims during the course of legal proceedings brought against them by the banks, and specifically designed to damage them. They are primary proof of a conspiracy to pervert the course of justice by the banks, and any judge worth his salt would see through them in an instant, but any time one of these victims ever gets within sniffing distance of a settlement with one of these mafia banks, then they are hit with huge gagging orders as part of the settlement process, denying them the right to use these documents.
I could go on and report more, but I urge you to go to the website and read it and spend time on engaging with its contents. These good people deserve all the help they can get but there is a massive army of professional lawyers, accountants, insolvency practitioners, and bank consultants out there, weasels and vermin growing fatter on the money they are being paid to maintain this concerted financial attack on some of the most entrepreneurial people of our era. You would think that these professionals would have some shame at such dishonest actions, but there is no apparent shame evidently in earning fees culled from the misery of others, and predicated by crimes of such meanness and damaging magnitude that even Al Capone would blush for shame.
I was asked to speak at a break-out workshop which looked at the outcome from the HSBC Mexican money laundering affair, and what lessons we could draw from the entire episode.
I was particularly fortunate to be able make use of a detailed document issued by the US authorities who had supervised the deferred prosecution agreement against HSBC.
What I sought to achieve was to demonstrate how over a period of years, HSBC had routinely and deliberately under-resourced and under-valued any attempts to implement decent and workable anti-money laundering procedures and processes.
I made the point that in my opinion, this was a deliberate decision, predicated by the knowledge that the British financial regulators, the FSA and latterly, the FCA were unlikely to do anything to force HSBC to change.
I quoted from the US document;
“…HSBC Bank USA violated the BSA by failing to maintain an effective anti-money laundering program and to conduct appropriate due diligence on its foreign correspondent account holders.
“…A four-count felony criminal information was filed today in federal court in the Eastern District of New York charging HSBC with willfully failing to maintain an effective anti-money laundering (AML) program, willfully failing to conduct due diligence on its foreign correspondent affiliates, violating IEEPA and violating TWEA. HSBC has waived federal indictment, agreed to the filing of the information, and has accepted responsibility for its criminal conduct and that of its employees.
“…The record of dysfunction that prevailed at HSBC for many years was astonishing. Today, HSBC is paying a heavy price for its conduct, and, under the terms of today’s agreement, if the bank fails to comply with the agreement in any way, we reserve the right to fully prosecute it.
“…. “HSBC’s blatant failure to implement proper anti-money laundering controls facilitated the laundering of at least $881 million in drug proceeds through the U.S. financial system.
“…, this financial institution is being held accountable for turning a blind eye to money laundering that was occurring right before their very eyes.
“… 2006 to 2010, HSBC Bank USA severely understaffed its AML compliance function and failed to implement an anti-money laundering program capable of adequately monitoring suspicious transactions and activities from HSBC Group Affilliates, particularly HSBC Mexico, one of HSBC Bank USA’s largest Mexican customers. This included a failure to monitor billions of dollars in purchases of physical U.S. dollars, or “banknotes,” from these affiliates. Despite evidence of serious money laundering risks associated with doing business in Mexico, from at least 2006 to 2009, HSBC Bank USA rated Mexico as “standard” risk, its lowest AML risk category. As a result, HSBC Bank USA failed to monitor over $670 billion in wire transfers and over $9.4 billion in purchases of physical U.S. dollars from HSBC Mexico during this period, when HSBC Mexico’s own lax AML controls caused it to be the preferred financial institution for drug cartels and money launderers.
“…, identified multiple HSBC Mexico accounts associated with BMPE activity and revealed that drug traffickers were depositing hundreds of thousands of dollars in bulk U.S. currency each day into HSBC Mexico accounts. Since 2009, the investigation has resulted in the arrest, extradition, and conviction of numerous individuals illegally using HSBC Mexico accounts in furtherance of BMPE activity
What was being amply demonstrated here was the cynical and deliberate flouting of UK and US laws to help to prevent and forestall money laundering. It was typical of the kind of financial crimes being routinely committed by a wide cross-section of the UK and the US banking system, and it was the subject of wide discussion among those attending the workshop.
For the first time, I found routine agreement among delegates that the banking industry had become synonymous with organised crime. Many otherwise more conservative attendees expressed their grave concern and their repugnance at the way in which so many of our most famous banking names were now behaving. It is becoming very much harder to believe that the banks will be able to rely on the routine support they have traditionally enjoyed from most ordinary members of the public.
The election of Jeremy Corbyn to the leadership of the labour Party means that banking crime and financial fraud will now become an electoral issue.
Hitherto, the love affair between Gordon Brown and the Square Mile was a matter of grave embarrassment for many of us who knew better. Brown’s routine praising of the financial sector at mansion House dinners was the stuff of many bad jokes. These were exacerbated by the relationship between Ed Balls and some very dubious practitioners in the development of the PFI relationships. During this period, it seemed like the labour Party were openly supporting the bad practices of the City.
But now, the new Labour leadership will focus the attention of the electorate on the relationship between the Tory party and their very crooked friends in the City, and the degree of protection that the Square Mile gangsters and their Consiglieri, their Capos, and their Godfathers will become much more identifiable. Bank crime will now become much more identifiable as a City practice and their friends in the Tories will be seen as being primary beneficiaries.
The spotlight of political focus is now about to be shone brightly on the dark alleys and stews of the Square Mile, as well as in the dining rooms and the dealing rooms where these crooked vermin gather.
We are due to enjoy some interesting times!