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Tuesday, July 24, 2012

IRS investigates HSBC

IRS EXAMINING CLAIM OF HSBC WHISTLEBLOWER


WND EXCLUSIVE

IRS EXAMINING CLAIM OF HSBC WHISTLEBLOWER

WND series prompted authorities, Senate report confirms massive fraud


As U.S. senators digest a sharply critical committee report confirming massive international money laundering by global banking giant HSBC, the Internal Revenue Service is acknowledging receipt of a whistleblower claim from a former employee of the bank who presented 1,000 pages of evidence to WND six months ago, after local and federal authorities ignored him.
A series of WND stories, beginning in February, reported the evidence collected by John Cruz, a former vice president and relationship manager for HSBC in New York who documented hundreds of millions of dollars in suspicious transactions he pulled from a bank computer system before he was fired. Cruz was terminated in 2010, after two years at HSBC, for “poor performance,” but he contends he was let go because senior management didn’t want to him to pursue his personal investigation.
In a letter to Cruz, the supervisor of the IRS whistleblower office in Ogden, Utah, acknowledged the agency is evaluating Cruz’s claim to determine whether an investigation is warranted. Cruz previously told WND he met with special agents with the IRS criminal division in April and handed over a computer disc with copies of his internal documents.
The agents, according to Cruz, were overwhelmed with the volume and detail of the information, calling it “mind-boggling.”
Meanwhile, a Senate report released last week presents evidence HSBC abetted massive money laundering by Iran, terrorist organizations, drug cartels and organized criminals throughout the world. The report said HSBC transferred $19 billion for Iran and $7 billion in physical cash for Mexico.
WND’s series of articles on HSBC has caused fallout for WND senior reporter Jerome Corsi and for WND, which saw one of the articles temporarily blocked when HSBC filed a complaint with an Internet provider that turned out to be unwarranted.
Reuters recently reported an officer in HSBC’s compliance operations in Delaware who questioned transactions he suspected were linked to Hamas was berated and overruled.
One of the largest banks in the world, London-based HSBC has about 7,500 offices in more than 80 countries and territories in Europe, North and South America, the Asia-Pacific region, the Middle East and Africa.
As WND reported, law enforcement authorities sat on the HSBC money-laundering allegations, even denying they were handed the same information by a whistleblower, until the story was exposed by WND.
WND also reported evidence that Eric Holder’s Justice Department has not investigated money laundering charges in deference to bank clients of Washington-based law firm Covington & Burling, where Holder was a partner prior to joining the Obama administration.
In February, when WND asked HSBC to respond to the money laundering allegations, the bank issued a statement insisting it was cooperating with authorities.
“We support efforts to protect the integrity of the financial system, and our commitment to AML (anti-money laundering) includes rigorous internal processes and a close working partnership with regulators and law enforcement,” the statement said.
In a video interview with WND, Cruz detailed how he turned over his information on HSBC to authorities more than two years ago to Frank J. DiGregorio, a detective sergeant in the office of the Queens County District Attorney, and Graham R. Klein, special agent at the U.S. Department of Homeland Security.
Cruz previously told WND he handed over his evidence at a meeting in April to Special Agent David Wagner and supervisory Special Agent Kevin B. Sophia with the Department of Treasury’s IRS criminal investigation division.
Among the evidence handed over was about 19 to 20 hours of recorded discussions with HSBC employees concerning his allegations.
“They told me that if the information on the computer disk and in the audio files was as I represented, the IRS agents were talking about arresting HSBC bank employees,” Cruz said.
Cruz has expressed his frustration with federal law enforcement.
“It’s a circle,” Cruz explained in a previous interview. “I turn over the information to law enforcement, and law enforcement turns around and gives the information right back to the bank for the bank to conduct their own internal investigation.”
HSBC ‘a criminal organization’
In his position as a vice president and a senior account relationship manager in New York, Cruz worked in a region that accounts for approximately 50 percent of HSBC’s North American revenue. He was assigned to work with several branch managers to identify accounts for which HSBC might introduce additional banking services.
Cruz told WND he recorded hundreds of hours of meetings he conducted with HSBC management and bank security personnel during which he charged various bank managers were engaging in criminal acts.
“I have hours of hours of recordings, ranging from bank tellers, to business representatives, to branch managers, to executives,” he said. “The whole system is designed to be a culture of fraud to make it look like it’s a legal system. But it’s not.”
Cruz explained that after many repeated efforts, he gave up on the idea that HSBC senior management or bank security would pursue his allegations to investigate and stop the wrongdoing.
“My conclusion was that HSBC was not going to do anything about this account because HSBC management from the branch level, to senior bank security, to executive senior management was involved in the illegal activity I found,” he said.
After repeated attempts to bring the information to the attention of law enforcement officers, Cruz hit a brick wall until WND examined his documentation and determined his allegations were sufficiently substantiated to merit publication.
“HSBC is a criminal organization,” he stressed. “It is a culture of crime.”
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