The giant HSBC bank, which agreed to pay a huge US fine several months ago for clandestine dealings with Iran and other sanctioned countries, may face a criminal trial for its actions.
HSBC’s $1.9 billion settlement deal with the American authorities over money laundering charges has proven controversial and is now before the judge overseeing the case.
The deal between HSBC and the US government—known as a deferred prosecution agreement (DPA)—would exempt HSBC from prosecution.
But The Guardian of Britain says US federal Judge John Gleeson is considering rejecting the deal, a move that could leave London-based HSBC facing criminal prosecution and the threat that its charter to do business in the US could be revoked.
The bank was founded in Hong Kong in 1865, but moved its headquarters to London when Hong Kong reverted to China. In 1980, HSBC bought Marine Midland, an American bank, and has had a major American presence since then. (HSBC originally stood for Hongkong and Shanghai Banking Corp.)
US authorities reached an agreement with HSBC last December after uncovering evidence that the bank had illegally conducted transactions on behalf of Mexican drug lords, terrorists and customers in Iran, Cuba, Libya, Sudan and Myanmar—all countries subject to US sanctions.
Judge Gleeson, a former assistant attorney general, made his name prosecuting drug rings and organized crime, most notably securing the conviction of John Gotti, the Gambino crime family boss in New York City.
The Guardian said the Justice Department is believed to be challenging the need for Gleeson’s approval while the judge is upholding his opinion that he must sign off on the DPA.
John Coffee, a professor of law at Columbia University, said judges are increasingly unhappy with DPAs.
Senator Chuck Grassley, Republican of Iowa, lambasted the Justice Department over the settlement last year and said it was “inexcusable” that they had not brought a criminal prosecution against HSBC.
