The New Measure of DOJ Seriousness: The Charges It Defers

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In an article on the upcoming HSBC settlement, Reuters seems impressed with the fine the bank may pay for the assistance it gave to drug gangs and terrorists and other crooks by  laundering their money: $1.8 billion. It goes on to talk about “how big a signal” DOJ wants to send with this settlement.

The emphasis, of course, should be on that word “settlement.” One that will likely result in a Deferred Prosecution Agreement, in which no one gets charged, not even for the egregious conduct HSBC engaged in.

Because ultimately, Reuters is measuring this big signal by the seriousness of the criminal charges DOJ doesn’t file.

In regulatory filings, HSBC has said it could face criminal charges. But similar U.S. investigations have culminated in deferred prosecution deals, where law-enforcement agencies delay or forgo prosecuting a company if it admits wrongdoing, pays a fine and agrees to clean up its compliance systems. If the company missteps again, the Justice Department could prosecute.

[snip]

The agreements “have become a mainstay of white collar criminal law enforcement,” U.S. Assistant Attorney General Lanny Breuer said in September during an appearance at the New York City Bar Association.

“I’ve heard people criticize them and I’ve heard people praise them. DPAs have had a truly transformative effect on particular companies and, more generally, on corporate culture across the globe.”

If U.S. prosecutors agree to a deferred agreement, they still could wield a powerful legal tool by accusing the bank of laundering money.

That would be a much more serious charge than if prosecutors, in a deferred agreement, charged HSBC with criminal violations of the Bank Secrecy Act, a law that requires banks to maintain programs that root out suspicious transactions.

[snip]

A charge of money laundering would be a rare move by the Justice Department and would send a signal to other big banks that the agency is intent on cracking down on dirty money moving through the U.S. financial system. [my emphasis]

No, seriously. A legitimate report just said that DOJ will send “a signal” based on ratcheting up the seriousness of the crimes it makes disappear with one of Lanny Breuer’s flaccid DPAs. It will send “a signal” with the seriousness of the charges it will effectively excuse.

Heck. If we’re not going to really charge these banksters, why not add on murder or drug trafficking or terrorism charges, or any of the other crimes they abetted? That would really send “a signal” now, wouldn’t it, deferring even more serious charges that real people would do hard time for?

The Senate has already accused HSBC of money laundering. But mere accusations–even with promises to do better–do nothing.

No matter how serious a charge those accusations involve excusing.

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6 replies
  1. Charles D says:

    If you or I laundered money for a drug cartel, do you think the federal prosecutor would fine us 1/20 of our annual income and send us home?

  2. earlofhuntingdon says:

    No admissions of guilt. No crimes properly investigated or documented or fully disclosed on the record to the banking and investing public. No business practices changed. No serious changes to sitting management or board members, except for mild embarrassment. Not about committing or aiding the commission of major felonies, mind, but about getting caught without being totally immunized. I guess that’s what it takes for NYC to overtake the City of London as the world’s top money laundering locale.

    The fine, while hefty by ordinary standards, is probably a couple of years’ worth of profits from laundering tens of billions for drug lords, arms dealers, wealthy individuals, and alphabet soup government agencies and their contractors.

    As if Mr. Obama would upset the applecart of banking lobbyists’ money destined for Democratic Party treasuries. But don’t get caught stealing that loaf of bread, Jean Valjean. So as to avoid existential moral hazard, you will dispatched to the galleys for your crime.

  4. P J Evans says:

    One of the Wall Street crooked operations is going to pay a fine of less than $500 million, when they caused accounts of real people to lose far more value than that, and they started the economic crash.

  5. Greg Bean (@GregLBean) says:

    “The scale of the theft is staggering. Somewhere between $21 and $32 trillion is hidden behind the vast walls of tax haven secrecy. That’s the equivalent of one third of all global annual income. Somewhere between 60 and 70% of all international trade flows through them so that profits can be siphoned off untaxed.

    The scale alone means tax havens have a material impact on levels of global inequality and poverty. But more insidious is what they actively facilitate. Tax havens are in the background of practically every instance of large-scale corruption and economic crime of the last thirty years. Every corrupt leader, every major arms dealer and drug cartel, as well as most multinational corporations rely on their ‘discretion’ to do business. It’s a morality-blind service industry for the ultra-rich. Forget the 1% – this industry exists largely for the pleasure and benefit of the 0.02%; the 10 million people who ‘own’ the bulk of the $21trillion hidden.”

    http://www.commondreams.org/view/2012/12/04-0

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