by Rowan Bosworth-Davies
Financial Crime Expert
September 13, 2015
Jesus College, Cambridge hosted, once more, the world's
Symposium on Economic Crime,
and over 500 distinguished speakers and panelists drawn from the
widest possible international forum, gathered to make presentations
to the many hundreds of delegates and attendees.
This Symposium has indeed become an icon among other international
gatherings of its kind and over the years, it has proved to be
highly influential in the driving and development of international
policy aimed at combating international financial and economic
What became very quickly clear this year was the general sense of
deep disgust and repugnance that was demonstrated towards the global
I can say with some degree of certainty now that a very large number
of academics, law enforcement agencies, and financial compliance
consultants are now joined, as one, in their total condemnation of
significant elements of
the global banking sector for their
organized criminal activities.
Many banks are widely identified now as nothing more than enterprise
criminal organizations, who engage in widespread criminal practice
and dishonest conduct as a matter of course and deliberate
Speaker after speaker addressed the implications of the scandalous
PPI fraud, whose repayment and
compensation schedules now run into billions of pounds.
Some speakers struggled with the definition of such activity as 'Mis-selling'
and needed to be advised that what they were describing was an
institutionalized level of organized financial crimes involving
fraud, false accounting, forgery and other offences involving acts
of misrepresentation and deceit.
One of the side issues which came out of this and other debates, was
the general and genuine sense of bewilderment that management in
these institutions concerned, (and very few banks and financial
houses have escaped censure for this dishonest practice) have walked
away from this orgy of criminal antics, completely unscathed.
The protestations from management that
these dishonest acts were carried out by a few rogue elements, holds
no water and cannot be justified.
Similar exercises were carried out examining other forms of
financial malfeasance, including Forex manipulation and specifically
The latter area of wrongdoing was amplified and illuminated by the
recent conviction of the broker Tom Hayes whose bizarre and
dysfunctional behavior at Southwark Crown Court, even while he was
standing trial for his criminal wrongdoing became subject to
His arrogance and the degree of contempt
he demonstrated for prosecuting counsel and the jury was described
as 'truly breathtaking'
My colleague who attended the trial, described Hayes as appearing
aghast that he should be standing in the dock, proving, as my friend
said, how little he really understood of the moral standards which
could and should be expected of people who trade in those markets
that will have a strong impact on other people's investments and
savings, and described Hayes as possessing no moral or ethical
dimension at all.
One workshop which I found particularly revealing, and from which I
am still trying to extricate my emotions was the break-out session
hosted by members of the SME Alliance.
This is an organization made up of ordinary people who have had the
misfortune to be defrauded out of millions of pounds by the major
banks, and from whom they are seeking redress.
Their excellent website,
significant information about them and their campaigns.
I listened with mounting horror and a feeling of growing nausea,
while examples of massive conspiracies to defraud small and medium
size businesses were outlined in cryptic detail. Good honest (but
possibly unsophisticated) businessmen being inveigled into
commercial relationships with banks, at the same time as seeking
commercial lending to enhance and develop their already successful
Particularly nauseating was evidence of the criminal defrauding (I
refuse to use the weasel words 'mis-selling') achieved through the
use of little-understood and unwanted derivative instruments.
In the end, I sat there, open-mouthed while evidence against the
same old usual scum-bag financial institutions, was unrolled, and a
lengthy list of agencies, all apparently dedicated to dealing with
fraud and financial crime, lamely sought to explain why they were
powerless to help these victims.
This was followed by a lengthy list of names of major law firms, and
Big 5 accounting firms who were willing to join with these
pariah banks to,
bring complex and expensive
legal actions against these victims
forcing them from their homes
repossessing properties they had
worked for years to create,
...while all the time, the regulators
and the other agencies, including to my shame and regret, certain
spineless police forces, stood by and sought to justify their
At one stage, we were shown how banks ritually and deliberately take
transcripts of telephone calls made between complainants and the
bank, and deliberately and systematically go through these
conversations, re-editing them and reproducing them in a format
which is much more favorable to the bank.
I mean, occasionally it can be difficult to interpret a specific
word or even part of a sentence uttered on a bad telephone line, but
this was evidence of routine re-editing that had gone on, page after
page after page, suppressing conversation which put the bank in a
bad or critical light, and purporting to be documentary evidence as
to the truth of a conversation.
These documents were blatant forgeries, and at one point, not being
able to remain quiet any longer, I burst out in my anger,
'These are nothing but downright
forgeries, and these people have uttered them'.
These documents had been used against
these victims during the course of legal proceedings brought against
them by the banks, and specifically designed to damage them.
They are primary proof of a conspiracy
to pervert the course of justice by the banks, and any judge worth
his salt would see through them in an instant, but any time one of
these victims ever gets within sniffing distance of a settlement
with one of these mafia banks, then they are hit with huge gagging
orders as part of the settlement process, denying them the right to
use these documents.
I could go on and report more, but I urge you to go to the website
and read it and spend time on engaging with its contents.
These good people deserve all the help
they can get but there is a massive army of professional lawyers,
accountants, insolvency practitioners, and bank consultants out
there, weasels and vermin growing fatter on the money they are being
paid to maintain this concerted financial attack on some of the most
entrepreneurial people of our era.
You would think that these professionals
would have some shame at such dishonest actions, but there is no
apparent shame evidently in earning fees culled from the misery of
others, and predicated by crimes of such meanness and damaging
magnitude that even Al Capone would blush for shame.
I was asked to speak at a break-out workshop which looked at the
outcome from the
HSBC Mexican money laundering affair,
and what lessons we could draw from the entire episode.
I was particularly fortunate to be able make use of a detailed
document issued by the US authorities who had supervised the
deferred prosecution agreement against HSBC.
What I sought to achieve was to demonstrate how over a period of
HSBC had routinely and deliberately
under-resourced and under-valued any attempts to implement decent
and workable anti-money laundering procedures and processes.
I made the point that in my opinion, this was a deliberate decision,
predicated by the knowledge that the British financial regulators,
the FSA and latterly,
the FCA were unlikely to do
anything to force HSBC to change.
I quoted from
the U.S. document:
...HSBC Bank USA violated the
BSA by failing to maintain an effective anti-money
laundering program and to conduct appropriate due diligence
on its foreign correspondent account holders.
...A four-count felony criminal
information was filed today in federal court in the Eastern
District of New York charging HSBC with willfully failing to
maintain an effective anti-money laundering (AML) program,
willfully failing to conduct due diligence on its foreign
correspondent affiliates, violating IEEPA and violating TWEA.
HSBC has waived federal indictment, agreed to the filing of
the information, and has accepted responsibility for its
criminal conduct and that of its employees.
...The record of dysfunction
that prevailed at HSBC for many years was astonishing.
Today, HSBC is paying a heavy price for its conduct, and,
under the terms of today's agreement, if the bank fails to
comply with the agreement in any way, we reserve the right
to fully prosecute it.
...."HSBC's blatant failure to
implement proper anti-money laundering controls facilitated
the laundering of at least $881 million in drug proceeds
through the U.S. financial system.
..., this financial institution
is being held accountable for turning a blind eye to money
laundering that was occurring right before their very eyes.
... 2006 to 2010, HSBC Bank USA
severely understaffed its AML compliance function and failed
to implement an anti-money laundering program capable of
adequately monitoring suspicious transactions and activities
from HSBC Group Affiliates, particularly HSBC Mexico, one of
HSBC Bank USA's largest Mexican customers.
This included a failure to
monitor billions of dollars in purchases of physical U.S.
dollars, or "banknotes," from these affiliates. Despite
evidence of serious money laundering risks associated with
doing business in Mexico, from at least 2006 to 2009, HSBC
Bank USA rated Mexico as "standard" risk, its lowest AML
As a result, HSBC Bank USA
failed to monitor over $670 billion in wire transfers and
over $9.4 billion in purchases of physical U.S. dollars from
HSBC Mexico during this period, when HSBC Mexico's own lax
AML controls caused it to be the preferred financial
institution for drug cartels and money launderers.
..., identified multiple HSBC
Mexico accounts associated with BMPE activity and revealed
that drug traffickers were depositing hundreds of thousands
of dollars in bulk U.S. currency each day into HSBC Mexico
accounts. Since 2009, the investigation has resulted in the
arrest, extradition, and conviction of numerous individuals
illegally using HSBC Mexico accounts in furtherance of BMPE
What was being amply demonstrated here
was the cynical and deliberate flouting of UK and US laws to help to
prevent and forestall money laundering.
It was typical of the kind of financial
crimes being routinely committed by a wide cross-section of the UK
and the US banking system, and it was the subject of wide discussion
among those attending the workshop.
For the first time, I found routine agreement among delegates that
the banking industry had become synonymous with organized crime.
Many otherwise more conservative
attendees expressed their grave concern and their repugnance at the
way in which so many of our most famous banking names were now
behaving. It is becoming very much harder to believe that the banks
will be able to rely on the routine support they have traditionally
enjoyed from most ordinary members of the public.
The election of Jeremy Corbyn to the leadership of the labour
Party means that banking crime and financial fraud will now become
an electoral issue.
Hitherto, the love affair between Gordon Brown and the
Square Mile (City of London) was a matter of grave
embarrassment for many of us who knew better. Brown's routine
praising of the financial sector at mansion House dinners was the
stuff of many bad jokes.
These were exacerbated by the
relationship between Ed Balls and some very dubious
practitioners in the development of
the PFI relationships. During this
period, it seemed like the labour Party were openly supporting the
bad practices of
the City (of London).
But now, the new Labour leadership will focus the attention of the
electorate on the relationship between the Tory party and their very
crooked friends in the City, and the degree of protection that the
Square Mile gangsters and their Consiglieri, their Capos,
and their Godfathers will become much more identifiable.
Bank crime will now become much more
identifiable as a City (of London) practice and their friends in the
Tories will be seen as being primary beneficiaries.
The spotlight of political focus is now about to be shone brightly
on the dark alleys and stews of the Square Mile, as well as in the
dining rooms and the dealing rooms where these crooked vermin
We are due to enjoy some interesting times!