This week a Senate investigation detailed
that HSBC had lax controls against money-laundering and often ignored warnings
about clients with ties to drug cartels and terrorists.

The bank is also reportedly nearing
a settlement with the Justice Department, which has two criminal
investigations into whether HSBC was complicit in money-laundering and tax
evasion.The federal regulator that
should have been keeping tabs on all this, the Office of the Comptroller of the
Currency, also came under fire for “systemic
weaknesses” in its oversight of banks’ anti-money laundering procedures.

The report reaches back more than a decade, and in testimony
in front of the Senate this week, the bank apologized
and vowed it has recently overhauled its anti-money-laundering efforts. The
bank’s head of compliance stepped
down this week. But the Senate report notes that HBSC made similar promises
of reform back
in 2003 when it was cited by regulators for poor oversight of suspicious
transactions. HSBC declined to comment further on the report or on the DOJ’s
ongoing investigation.

There are lot of blunders and blind spots detailed in the
Senate’s 335-page takedown. Here’s a rundown—in each instance, we’ve
linked to the relevant page in the report.

17,000: The backlog of unreviewed, potentially
suspicious activity alerts at HSBC’s U.S. arm as uncovered by government
regulators in 2010.

200: Number of compliance staff in
bank’s U.S. branch between 2006 and 2009, of which a smaller group was charged
with making sure the bank was following anti-money-laundering rules. HBUS had
millions of accounts, and more than 16,000 employees overall, and according to
the report, kept compliance staff small as a cost-cutting measure.Members of the anti-money-laundering
group told investigators that understaffing was a key problem.

85: Number of problems with the anti-money-laundering
efforts at bank’s U.S. arm red-flagged by the OCC between 2005 and 2010. That
was a third more than the next-closest major bank.

0: number of enforcement actions
the OCC took in that time period.

3: number of years, from 2006 to
2009, for which HSBC’s U.S. branch didn’t do any money-laundering monitoring for transactions with HSBC banks in
other countries.

15 billion: Total value of U.S.
dollar bills (as in paper money) the bank accepted as part of bulk-cash transactions
from foreign HSBC banks during that period, with no anti money-laundering
controls.

Concerns about HBMX,
the bank’s Mexican arm

7 Billion: U.S. dollars exported
from 2007-2008 from HBMX accounts to HSBC’s U.S. accounts. At the time, both
American and Mexican officials raised concerns that such a volume was only
possible if it included illegal drug money.

1: Rank of HBMX in repatriation of
U.S. dollars from Mexico for those years. HBMX is only the 5th
largest bank in Mexico.

50,000: Number of clients in 2008 with
U.S. dollar accounts at an HBMX shell operation in the Cayman Islands.

75: Estimated percentage of those
accounts for which HBMX had incomplete information on the account holder.

15: Estimated percentage of such
accounts for which the bank had no account holder information. (In 2009, HBMX closed
9,000 Cayman U.S. dollar accounts, but continues to allow new ones to be opened
there).

Potentially Violating
Sanctions

28,000: Number of transactions by HSBC’s
U.S. arm between 2001 and 2007 involving countries, groups, or individuals that
the U.S. Treasury has sanctions
against.

25,000: number of those
transactions that involved Iran. The vast majority, auditors
found, were sent through the U.S. without disclosing Iranian ties. In many
cases, foreign HSBC banks substituted their
own names for clients’ with Iranian ties to avoid triggering red flags.

300,000: dollar amount of a wire
transfer that went through HBUS because a compliance officer didn’t realize “Persia”
meant Iran.

2: transactions with Myanmar that slipped
through filters because they didn’t recognize “Burmese” or “Mynmar.” [sic]

2: Number of U.S. dollar accounts
established by HBSC’s European operation in the U.K. for the “Taliban.”
HSBC’s U.S. operation was unable to tell Senate investigators whether they ever
processed transactions for the account.

Other shady ties

1 billion: U.S. dollars bought from
HSBC between
2006 and 2010 by Al Rajhi, a Saudi Arabian bank previously cut off because
of ties to terrorism. An HSBC official fought
against concerns from compliance employees, because of the revenue they brought
to the bank.(He apologized
in front of the Senate committee Tuesday).

290 million: Amount in U.S. dollar travelers’
checks cleared by HSBC’s U.S. operation for a Japanese bank over four years.
The checks originated at a Russian bank and were brought in by 30 clients who
all claimed to be in the used car business. Compliance officers raised concerns
in 2005, but HSBC didn’t stop processing the checks until October 2008. (When
questioned by the Senate committee, the Japanese bank could
offer no explanation for why “the parties were using U.S. dollars to
purchase used cars located in Japan or why [the bank] had so little information
about the 30 clients carrying in U.S. dollars travelers checks totaling about
$500,000-$600,000 each day.”)

2,000: number of U.S.-based HSBC
accounts opened by “bearer-share”
corporations—where whoever physically holds the stock owns the
corporation, so there’s virtually no record of who owns them.

1,670: number of those accounts in the
bank’s Miami branch, holding $2.6 billion in assets. One such account was
linked to a Miami real estate family convicted
of tax fraud for hiding nearly $200 million through bearer-share accounts.
Another account, for a Peruvian family, was opened without the normal controls
on bearer-shares. One HSBC executive wrote in an email in support of waiving
the requirements, “this is too
important a family in Peru for us not to want to do business with.”