Monday, October 19, 2015

Money laundering figures prove the banks and the lawyers are still conspiring to subvert the law.

Criminal conduct at Britain’s banks is “a threat to national security” because of the huge damage it will cause to the economy, the head of the country’s top crime-fighting body has warned. 

Keith Bristow, director general of the National Crime Agency, said money laundering by banks and their other well-documented criminal activities risked undermining the “reputation of the UK” and could trigger a sharp fall in the tax revenues generated by the City.

Regular readers of my blogs will know that I have been making these serious allegations for a long time now. I have said repeatedly that the banks and their learned friends in the (il)legal profession, represent a major threat to the well-being of the common weal. I have repeatedly identified organised criminal behaviour as representing a leitmotif for major banks, and they are helped and supported in their dishonest conduct and their criminal actions by their legal advisers. Well, now the Director of the National Crime Agency agrees with me, so all those bent bankers and crooked lawyers who take such delight in criticising my articles and choice of commentaries, can eat their own words.

The NCA assesses that many hundreds of billions of pounds of international criminal money is being actively laundered through UK banks, and their subsidiaries, each year.

The scale of the laundering of these criminal proceeds is now so huge that it is therefore a strategic threat to the UK’s economy and reputation. The proceeds of virtually all serious and organised crime in the UK as well as the proceeds of a significant amount of international serious and organised crime (including corrupt Politically Exposed Persons seeking to launder the proceeds of their corruption and hide stolen assets in the UK) is being laundered into and through the UK, and these figures give the lie to the protestations of the banks that they are doing everything possible to put their discredited houses in order.

Yes, they are spending a vast amount of money hiring staff to work in anti-money laundering and financial crime interdiction roles, but a significant number of these new hires are first-timers who have little or no real experience of dealing with international criminals. And all the time, the dirty money is flooding into these banks, with the open connivance of the lawyers who are willing to provide a wide range of dishonest services for international clients who are willing to pay high fee levels, as long as no awkward questions are asked.

This state of affairs carries a very high level of risk, but sadly, it has needed a very senior police officer to point out that the criminal conduct of the banks poses a strategic threat to the financial interests of this country. There will be many sleek, shiny-faced suits in any number of plush offices who will tut-tut at the temerity of a mere policemen making a public statement of such a nature.

One group of policy-makers who will deeply resent the words of the Director of the NCA will be George Osborne’s advisers in H.M.Treasury. They work for a politician who is only too happy to see vast sums of foreign money coming into London, but like all politicians, George doesn’t want bad news or inconvenient challenges (such as “ this the kind of money we should be accepting...”) attaching themselves to his enjoyment of the cash flows!

Keith Bristow has warned that “many hundreds of billions of pounds of criminal assets” are being laundered through British financial institutions. ‘I believe the London property market has been skewed by laundered money. Prices are being artificially driven up by overseas criminals who want to sequester their assets here in the UK.’, These statements have been made as part of an important announcement of details of a landmark information-sharing agreement with banks to tackle illegal activity.

Now, this is going to be a very interesting development in crime fighting, and I fear that it will be doomed to failure in exactly the same way as the money laundering interdiction regime has failed in the UK. 

Why am I so cynical about this?

Because it will depend on the banks playing their part in full, and telling the truth when confronted by a challenging application, and telling the truth isn’t exactly the strong suit for these Mafiosi..

The proposed deal will see 10 of Britain’s biggest banks ‘voluntarily’ hand the NCA details of the accounts and financial transactions of people suspected of money laundering and other serious offences.

HSBC, at the centre of a storm over tax avoidance by clients of a Swiss subsidiary, is understood to be one of those participating. The deal will end decades of secretive practices, during which banks have traditionally refused to hand over account details without a court order.  Both the NCA and the banks expect to face legal challenges as a result, from customers angry that details about their financial dealings have been given to the authorities.

Among other difficulties will be what happens when the client accounts of a major law firm become the subject of an application. Lawyers are among the biggest money laundering facilitators, and they hold significant sums of money on behalf of clients. What is likely to be the outcome when the NCA makes an official demand for the accounts of a major client of one of the ‘magic circle’ law firms?

In my view, the amount of legal argument and process which this scenario is likely to generate, will slow down the investigative process immeasurably
Mr Bristow insisted, however, that the agreement was justified because the scale of money laundering in the City was so large that it posed a threat to the economy and national security.

During an interview he said: “We need the evidence to investigate people and bring them to justice. We have an interest as an agency in the reputation of the UK.

“It’s a national security risk. Hundreds of billions of criminal assets are laundered through UK financial institutions. Given how much our economy depends on financial services in this country, we can ill afford the reputation of those institutions to be damaged or for those institutions to lose their licences to operate because of criminals exploiting their services.

“We rely on the financial services and professional services sector for much of the wealth within our economy, so that is a significant threat to our national security.”

He is too late! Such sentiments might have been true 30 years ago, but frankly speaking, any private investor who puts his trust in the UK financial sector to look after his best interests is going to be royally screwed. You don’t believe me – just ask any of the members of SME Alliance Ltd and learn from their horror stories of the ways in which major UK banks saw them as sacrificial lambs, to be led to the slaughter. 

Mr Bristow, rather sweetly in my view, said the banks would benefit from the detection of criminal activity that would otherwise put their future in jeopardy, and insisted that only those suspected of serious criminality would be targeted.

He added: “We are not cheerleaders for the banks, but they deserve credit for taking some risk to help us target these people. It’s a genuine change through an information-sharing partnership that will give us opportunities that we would otherwise not have had.” 

Don’t be too ready to praise these crooked institutions yet Keith, wait for a couple of years and see how well the system is working! Suspend any cheerleading for British banks until you see some genuine change in their criminal behaviour!

The information-sharing agreement follows a meeting last year between Home Secretary Theresa May, the British Bankers’ Association, the Financial Conduct Authority and the NCA.

It will operate as a pilot scheme for a year, beginning this month, and will be expanded to include further banks if successful.

Each participating institution has agreed to pass on account information whenever the NCA signals that it has received a “suspicious activity” report from another institution about a customer’s financial dealings. The aim is to ensure that a person suspected of money laundering at one bank is not able to carry out similar activity elsewhere undetected.

The legal powers governing the new system are contained in section 7 of the 2013 Crime and Courts Act. It gives the banks and other organisations the legal right to disclose otherwise confidential information to the NCA to help it carry out its tasks. These include fighting economic and cyber crime, trafficking of people and drugs, and other forms of organised crime.

The NCA said it was necessary to focus on tackling criminal activity carried out through banks because the British banking sector was responsible for generating eight per cent of the country’s GDP, and 12 per cent of tax receipts.

The 10 institutions taking part include high street retail and investment banks. Their names are not being disclosed by the NCA because of concern that their cooperation with law enforcers could put them at a commercial disadvantage.

We are not told what will be the outcome when a bank hands over information requested by NCA, and where the information, upon investigation, proves that the bank concerned has been routinely ignoring suspicious transaction activity for a long time, thus effectively laundering the proceeds. Will this knowledge in turn trigger the kind of investigation and prosecution it properly should?

This is another reason why I say the banks concerned will have to be trusted to tell the truth about the transactions being requested, and I, for one, do not trust these specific banking institutions any further than I could spit them!

I am very grateful to Keith Bristow for making these observations and pointing out that the volume of criminal money passing through the banking institutions represents a major threat to the UK economy.

His intervention means that the politicians and the civil servants have now got to start taking the issue seriously, and realising that the issue of the criminal handling of all this criminal money, as well as the dishonesty of the banking institutions, has now become an important electoral issue.

The Tory government is deliberately and cynically dismantling a whole raft of financial regulations demanded by their banking friends in the City. They are using the excuse that they merely are removing red tape restrictions which they say are holding back British business, but in reality, this exercise in de-regulation is intended to make it easier for their light-fingered friends in the financial sector to accept more and more criminal money which is finding a temporary home in the City of London.

How do I know this?

Well, the Sunday Times reported on 18th October that that well-known laundering bank which likes to say ‘Yes’ to foreign drug money, HSBC, has decided to stay in the UK after all, instead of decamping to Hong Kong.

“...HSBC is leaning towards remaining in Britain after a number of victories in its battle to water down regulatory curbs on the banking industry. 

A series of recent government U-turns, including changes to the bank levy, mean it is more likely to keep its headquarters in London at the end of the year, according to shareholders and senior insiders. 

Chief executive Stuart Gulliver has secured “pretty much everything he wanted out of the government”, a high-level source said. And a top 10 shareholder said it was “more than likely that the bank will remain in the UK when the domicile review is completed”.

That would mark a substantial victory for George Osborne. The chancellor has been scrambling to convince HSBC and fellow FTSE 100 emerging markets lender Standard Chartered to retain their headquarters in London...”

Well I don’t know much about a victory for George Osborne, it seems to me that he has bowed down completely and abjectly to the pathetic empty threats of Stuart Gulliver and his Ton-Ton Macoute bully-boys!

Remember, this is the bank which was held out to dry by the US authorities for its part in a massive criminal money laundering case.

HSBC Holdings Plc’s $1.9 billion agreement with the U.S. to resolve charges it enabled Latin American drug cartels to launder billions of dollars was approved by a federal judge.

 “A pending criminal case is not window dressing” the judge wrote, noting that the case was filed and would remain pending for five years under the agreement. “By placing a criminal matter on the docket of a federal court, the parties have subjected their DPA to the legitimate exercise of the court’s authority.”

Lack of proper controls allowed the Sinaloa drug cartel in Mexico and the Norte del Valle cartel in Colombia to move more than $881 million through HSBC’s U.S. unit from 2006 to 2010, the government alleged in the case. The bank also cut resources for its anti-money-laundering programs to “cut costs and increase profits,” the government said in court filings...”

This is the banking institution that George Osborne wants to keep here in London, and for which he is prepared to feather-bed the regulatory requirements. You must decide whether this demonstrates George Osborne’s commitment to money laundering preventions!

HSBC threatened to move its domicile out of the UK, because of the tough regulatory regime it was being forced to operate within. As a result, Osborne has turned himself inside out to slash the bank levy and watered down the ring-fence rules that demand that banks segregate their retail arms from their investment side.

Now, you read it here in this blog months ago my prediction that HSBC and its dodgy overpaid executives would never leave the UK, because life was too easy for them here. And I was right, and it just got easier! 

As important is the fact that the Bank of England has dropped a proposed rule to require executives at failed banks to prove they did all they could to prevent a collapse.

In one move, they have rendered the regime which would have helped to ensure the  imprisonment of executives of failed banking institutions, null and void. In future reckless bankers whose institutions fail, like Fred the Shred at HSBC will no longer face the possibility of imprisonment for their criminal recklessness. Once again, the protected species are off the hook.

The Sunday Times reports that the final decision is still awaited, and that Gulliver still hopes to squeeze more concessions out of H.M.Treasury. Well, nothing would surprise me, so watch this space.

Looks like the money laundering possibilities just got better for British bankers. Dig in boys, fill your boots, just remember to remit George his share, but remember, just because it is paid through the tax-man, doesn’t make it any more legitimate. These monies are still the proceeds of crime!


anrigaut said...

Meanwhile, in Iceland, "26 bankers already sentenced to a combined 74 years in prison":

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