“ And in our cases against the non-Iranian banks that assisted in the same transactions , banks like Deutsche Bank , HSBC , Credit Suisse , CommerzBank , Royal Bank of Scotland — big global banks — they ’ ve admitted to conspiring with the Iranian banks that Courts have found liable for supporting terrorism . They ’ ve admitted it .”
“ And yet , Courts have narrowed the traditional scope of conspiracy liability for these big global banks , finding that , in terrorism cases , if the object of the conspiracy was not the specific terrorist act at issue or the costumer was not the actual triggerman , then these big banks cannot be liable for conspiring to provide support for terrorism . So here we have banks who admit that they purposefully violated their own standards and the law by shepherding high risk customers around the safeguards put in place specifically to prevent terrorism , and helped these costumers avoid the counterterrorism sanctions placed on those customers to specifically prevent them from supporting or committing terrorism . But Paulos said this is because the only place we can see these banks is in New York .
“ And like I said , these are the people they have to ride the subway with , go to whatever fancy restaurant they take federal judges to ,” he said . “ It ’ s stupid .”
Same Song Different Dance
“ Cartel Bank ,” a 2018 episode of the Netflix series “ Dirty Money ,” talks about how HSBC laundered money for drug cartels .
Back in the 1980s , Miami banks would accept duffel bags full of dirty cash deposits from drug traffickers without batting an eye . The 2000s saw branches from HSBC ’ s Mexico unit scooping up tremendous sums of U . S . dollars generated by cartel drug sales in the U . S . — without asking questions to ascertain their legitimacy and without reporting the deposits to the authorities .
Within HSBC , the Mexico unit was categorized as low-risk , solely based on its subsidiary status . However , the “ all in the family ” treatment should have taken a back seat to common sense given the context of cartel activity on the ground in Mexico .
According to documents reported in a Thompson-Reuters series of articles on the topic , prosecutors accused HSBC of intentionally flouting the law . A letter from William J . Ihlenfeld II , U . S . Attorney for the Northern District of West Virginia to Justice Department Officials stated the bank ’ s operations was a “ systemically flawed sham paper-product designed solely to make it appear that the Bank has complied ” with the Bank Secrecy Act and is able to detect money laundering .
This was a high-profile case and one that prompted the U . S . Senate Permanent Subcommittee on Investigations to compile a report and hold a hearing in which it condemned HSBC and the Office of the Comptroller of the Currency ( OCC ) for its lapse in spotting and addressing gaps in HSBC ’ s anti-money laundering ( AML ) policies and procedures .
HSBC was doing the exact same thing for Hamas and Hezbollah as they did for the cartels , according to Paulos . “ It ’ s just terrorism rather than drug trafficking — which we now know today is one and the same ,” he said .
Too Big to Fail and Too Big to Jail
Paulos has a theory about why nobody knew that banks were funding terrorism in the middle of the Iraq war .
“ This was right at the economic collapse — 2007 and 2008 — and banks we were told that banks were “ too big to fail ,” he explained . “ And I just think that people in the DOJ and at the Fed and OFAC and treasury were shitting their pants about the economic situation . And any bank they caught doing this kind of thing was let off with a slap of the wrist , and they certainly weren ’ t going to put anybody in jail .”
It was inconceivable , in the midst of a global financial crisis , for the government to actually enforce the laws that were in place to the fullest extent and shutter these banks , or at least their New York branches .
“ It was the dawn of a new era ,” Matt Taibbi wrote in his article “ Gangster Bankers : Too Big to Jail ” ( Rolling Stone , February 14 , 2013 ). According to Taibbi , “ The Justice Department , for the first time , admitted why it decided to go soft on this particular kind of criminal . It was worried that anything more than a wrist slap for HSBC might undermine the world economy ,” he wrote .
Taibbi quoted Assistant Attorney General Lanny Breuer at a press conference at the time : “ Had the U . S . authorities decided to press criminal charges , HSBC would almost certainly have lost its banking license in the U . S ., the future of the institution would have been under threat and the entire banking system would have been destabilized .”
This might help explain why Monopoly has those “ get out jail free ” cards .
Taking Banks To Civil Court
Civil lawsuits against banks for funding terrorism have emerged as a consequential avenue for holding financial institutions accountable for their alleged complicity in facilitating illicit activities . These lawsuits typically involve victims of terrorist attacks or their families seeking legal recourse against banks accused of providing financial support to terrorist organizations .
One prominent example is the case against the Arab Bank ( Linde v . Arab Bank PLC ), which faced a civil lawsuit brought by victims of terrorist attacks in Israel and the Palestinian territories . The lawsuit alleged that the bank knowingly provided banking services to individuals and entities affiliated with terrorist groups , enabling them to carry out attacks against civilians .
Plaintiffs specifically alleged that Arab Bank knowingly maintained accounts for individuals and entities linked to terrorism , processed payments to families of suicide bombers ,
48 x The Trial Lawyer