Is the HSBC Case the Time to Stop Deferred Prosecution Agreements?
Over the past decade, the U.S. Department of Justice has handed out a number of deferred prosecution agreements in money laundering and sanctions cases. Is that going to continue if DOJ and HSBC bank reach a settlement in connection with the DOJ's pending money laundering investigation?
Heather A. Lowe, director of government affairs at Global Financial Integrity, believes that the evidence is mounting to suggest that deferred prosecution agreements are not successful in preventing future crime, and she opposes such an agreement with HSBC.
She said, “At some point, guilty individuals and companies are just guilty. Law enforcement has to stop handing out get-out-of-jail free cards. Banks can’t be too big to prosecute, and the people responsible for making the decisions to launder criminal money must be held legally accountable.”
Raymond Baker, Director of Global Financial Integrity, added, “The practices implemented by these banks had real-life consequences. Money laundering is not a victimless crime. 50,000 people have died in Mexico since 2007 due to violence by the criminal networks laundering their money through banks in the U.S. and around the world. And the people making those decisions need to be held responsible.”
One thing that is expected in the event of an HSBC-DOJ settlement is that HSBC will pay a significant – a very significant – penalty, perhaps in the range of a record-setting $1.8 billion. Is that going to be enough to reach a deal, and, if so, will the deal be enough to ensure future compliance with anti-money laundering rules? Time will tell.