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HSBC Drug Cartel Money Laundering Guide

Define the major problem or problems.
Indicate how the problems are related to one another:
What has happened to the key players since the events in this case?
Use appropriate references supporting problem definition and subsequent experience of key players.
Analyze the situation. Explain the mechanisms that are causing the problem or problems.
Were the consequences they experienced as a result of their role appropriate under the circumstances and why?Use appropriate references supporting analysis of the situation. Integrate theories and concepts from the course material.

Present solution. Develop a structured plan of action. Who is to do what, when? (Solutions should follow logically from analysis—treat the problem(s), not the symptoms—what are the expected outcomes (both positive and negative) of the solution? What aspects of the problem remain unresolved by your solutions?)
What preventive and detective controls can be put in place to prevent this from happening again?

Please include citations.

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Mexican Drug Cartel Money Laundering

According to a report published by United Nations Office and Drug Crimes (UNODC), there are huge incentives for multinational banks to engage in global crime to draw funds which inflate their balance sheets.
HSBC is not different from the multinational banks which find their mention in the report. The bank played an important role in laundering billions of dollars across borders by allowing drug cartels to get around with such kind of money. In addition to this, HSBC bank violated the trade sanctions laid down by the U.S. when they illegally transacted on behalf of their customers who were in countries like Libya, Cuba, Sudan and Burma. In the report by U.S. Senate Committee, HSBC had transferred $7 billion (£4.3billion) in cash from Mexico to U.S. in 2007 and 2008 ("Banking giants' shame...", 2012).

The underlying problem was that due to AML controls, drug traffickers were not able to make large deposits to U.S. banks. Due to strict laws of AML, drug cartels were unable to find a bank in the U.S. which would accept large unexplained deposits. To overcome this problem, they transported the U.S. dollars to Mexico where these were deposited in Mexican banks. Thereafter, the cash was deposited in the U.S. financial system through Mexican financial system. In this way, U.S. dollars were smuggled to Mexico and deposited in Mexican bank or casa de cambio. Some of ...

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The solution discusses the HSBC drug cartel money laundering guide.

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