HSBC allowed fraudsters to move millions around the world, leaked documents claim

HSBC moved money involved in a Ponzie scheme that led to someone’s murder (Picture: Getty Images) Leaked documents have accused some of the UK and USA’s biggest banks of being involved in allowing money from a Ponzi scheme – possibly including a ‘gun-running’ mobster’s money – to be freely moved around the world.

The Financial Crimes Enforcement Network (FinCEN) files suggest large amounts of money was moved between accounts in ‘suspicious activity reports’ (SARs). 

SARs are what banks send to authorities if they suspect clients are doing anything illegal but do not have evidence of wrongdoing.

The 2, 657 documents were leaked to Buzzfeed News, who worked with the International Consortium of Investigative Journalists (ICIJ) and the BBC’s Panorama . Duped investors claim HSBC should have taken action sooner to close fraudulent accounts. 

Legally banks must do more than just file SARs and continue banking for those suspected clients. Banks are expected to stop moving money for people who are breaking the law. 

HSBC’s SARs exposed the millions that were laundered around the world and how criminals hid their money with anonymous British banks. 

HSBC was warned about the WCM777 Ponzi scheme in 2013 a year before it led to the death of investor Reynaldo Pacheco.

Reynaldo Pacheco’s body was found at the bottom of a lake bludgeoned He had signed up to the investment scam and was told to recruit more investors as he was promised they would be made rich.

Mr Pacheco recruited a woman who lost about $3,000 and that led to hired men kidnapping him before his body was found under water on a wine estate in California bludgeoned with rocks.

An officer who investigated his death said: ‘He was murdered for being a victim in a Ponzi scheme.’

The ponzi scheme was started by Chinese national Ming Xu who lived in Los Angeles and acted as a pastor at evangelical churches selling supposed investment opportunities in cloud computing to poor communities in the US, Colombia and Peru.

Ming Xu started the Ponzi scheme that HSBC moved money for (Photo: Facebook) The consortium’s Fergus Shiel said the FinCEN Files are an ’insight into what banks know about the vast flows of dirty money across the globe… The System that is meant to regulate the flows of tainted money is broken’.

The Ponzi scheme started after HSBCS was fined £1.4billion in the US for money laundering and it promised to clamp down on similar fraud.

Although the bank identified suspicious transactions between 2011 and 2017 the report did not include key facts about the owners of the accounts and where the money came from. 

After Xu was arrested in 2017 and jailed for three years he told the ICIJ that HSBC had not contacted him about his business and denied WCM777 was a Ponzi scheme. 

Pictured: The first SAR filed about the scam on October, 29 in 2013 about $6 million sent to accounts in Hong Kong (Picture: BBC) The documents also revealed that one of the US’s biggest banks might have assisted a Russian mafia boss to transfer over $1billion.

JP Morgan may have helped Semion Mogilevich, a man accused of crimes including gun running, drug trafficking and murder, move the large amount of money through the system. 

The US Financial Crime Investigation Network  is investigating the $2 trillion worth of transactions that the SARs show were made between 2000 and 2017.

FinCEN last week announced it would repair its anti-money laundering programmes after admitting the leak could impact the US’s national security. 

The second SAR that was filed in February 2014 about $15.4million suspected to be involved in a Ponzi scheme (Picture: BBC) Similarly the UK also revealed its plans to reform its register of company information to curb fraud and money laundering.

HSBC said: ‘Starting in 2012, HSBC embarked on a multi-year journey to overhaul its ability to combat financial crime across more than 60 jurisdictions… HSBC is a much safer institution than it was in 2012.’

In a statement, JP Morgan said: ‘We follow all laws and regulations in support of the government’s work to combat financial crimes. We devote thousands of people and hundreds of millions of dollars to this important work.’ has contacted HSBC for further comment.

What is a ponzi scheme?

Ponzi schemes are based on fraudulent investment management services—basically, investors contribute money to the ‘portfolio manage’ who promises them a high return, and then when those investors want their money back, they are paid out with the incoming funds contributed by later investors.
The person organising this type of fraud is in charge of controlling the entire operation; they merely transfer funds from one client to another and forgo any real investment activities.
Source: Investopedia

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