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HSBC to pay record $1.9 billion U.S. fine in money laundering case

Dec 11 2012 Carrick Mollenkamp and Brett Wolf, Thomson Reuters reporting team

HSBC Holdings Plc agreed to pay a record $1.92 billion in fines to U.S. authorities for banking lapses including allowing itself to be used to launder a river of drug money flowing out of Mexico. Mexico's Sinaloa cartel and Colombia's Norte del Valle cartel between them laundered $881 million through HSBC and a Mexican unit, the U.S. Justice Department said on Tuesday. In a deferred prosecution agreement with the Justice Department, the bank acknowledged it failed to maintain an effective program against money laundering and failed to conduct basic due diligence on some of its account holders. Under the agreement, which was reported by Reuters and Compliance Complete last week, the bank agreed to take steps to fix the problems, forfeit $1.256 billion, and retain a compliance monitor. The bank also agreed to pay $665 million in civil penalties to regulators including to the Office of the Comptroller of the Currency, the Federal Reserve, and the Treasury Department. HSBC

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