What Does HSBC Have to HIDE?

I have been looking into the actions of HSBC who were instrumental in transferring money from UK and European bank accounts to Stanford International Bank in Antigua. From the information given by the forensic accountant Karyl Van Tassel of FTI Consulting and the wire instructions for transferring my money to Stanford International Bank in Antigua it became clear that something was seriously wrong.

I contacted HSBC and asked for proof that my money was indeed transferred to Stanford International Bank in Antigua, I new they would not be able to provide this because of the report by Karyl Van Tassel. I was immediately told since I did not have a bank account with HSBC they would not talk to me, I then spoke to the Banking Ombudsman who told me I would have to go through my bank where the money was originally transferred from.

After many months of discussions with Barclay's Bank and calling HSBC's bluff by paying the 50 GB pounds that HSBC demanded to provide proof the money was sent to Stanford International Bank in Antigua, I again met with a brick wall. Barclay's were told by HSBC that they refused to release the information without a Court Order. Barclay's were as astounded by the behaviour of HSBC as I was, these are not the actions of a bank that has nothing to hide!

I then consulted a lawyer, one who incidentally had won a case against HSBC recently involving wire transfers. He kindly took a preliminary look at my evidence and said he thought I had a good case against the bank. The bad news is the banking ombudsman will not help since I did not bank with HSBC, and the lawyer said unless I had limitless cash to throw at the case HSBC could draw out the case until I ran out of money. It could cost me tens of thousands of pounds just to get a court order to force them to release details of where the money was transferred to.

This is unbelievably and unjust, that a bank like HSBC can refuse to disclose what it did with a persons money and unless you are rich you will have no recourse for justice. How can I, an old age pensioner who has lost her life savings fight for justice against a Bank like HSBC?

I will outline below my case against HSBC perhaps a politician or an investigative reporter will help me find justice.

Stanford was first investigated 20 years ago when he became a subject of a joint Scotland Yard-FBI investigation into so-called “brass-plate” banks on the Caribbean island of Montserrat. The investigation was set up after the tiny island, with a population of fewer than 13,000 people, had been targeted by criminals who set up more than 300 banks and rapidly found itself at the centre of a worldwide money laundering operation. Among them was the Guardian International Bank, created by Allen Stanford. The bank was suspected of laundering drug money from the notorious Medellin and Cali drug cartels run by Pablo Escobar and the Orejuela brothers, according to former FBI agent Ross Gaffney, who headed the task force set up to investigate the suspicious explosion of offshore banks on the island. Before the investigation could develop further, Stanford was forced to surrender his Montserrat banking license by the British Government and left the island only to open Stanford International Bank in Antigua, who despite Stanford being a declared bankrupt in the United States and warnings from the FBI and Scotland Yard was granted a banking license.

American forensic accountant Karyl Van Tassel of FTI Consulting published a report for the SEC stating that none of the money investors pumped into Stanford International Bank (SIB) actually went to Antigua & Barbuda where the bank was based. Karyl Van Tassel, who was hired by the court-appointed receiver in the Securities Exchange Commission (SEC) civil case against Sir Allen Stanford, said the money went instead to Stanford company accounts at banks in the United States and Canada. Van Tassel found that between January 1, 2008 and February 17 this year, US $2.1 billion in deposits money went to Toronto Dominion Bank in Canada, another US $624 million went to Trustmark National Bank, which is based in Mississippi, and US $801 million went to the Bank of Houston.

Having looked at the money laundering regulations introduced throughout the European Economic Area (EEA) in 2007 which were passed into British law as Statutory Instrument 2007 number 2157, there are a couple of points to be noted:

The regulations state: A credit institution (“the correspondent”) which has or proposes to have a correspondent banking relationship with a respondent institution (“the respondent”) from a non-EEA state must—(a) gather sufficient information about the respondent to understand fully the nature of its business; (b) determine from publicly-available information the reputation of the respondent and the quality of its supervision. As I pointed out earlier Alan Stanford’s Guardian International Bank situated on Montserrat was being investigated by Scotland Yard and the FBI for money laundering which would usually undermine one’s ‘reputation’ in banking. Further SIB was audited by an unknown auditor.

The regulations also state: A credit institution must not enter into, or continue, a correspondent banking relationship with a shell bank….A “shell bank” means a credit institution, or an institution engaged in equivalent activities, incorporated in a jurisdiction in which it has no physical presence involving meaningful decision-making and management, and which is not part of a financial conglomerate or third-country financial conglomerate. As I pointed out earlier a forensic audit proved money was never sent to Antigua but diverted to US and Canadian banks indicating that the mind and management of SIB was not in Antigua. Further SIB was not part of Stanford Financial Group. It was an affiliate.

While there is little doubt that the subtleties of the Stanford situation have only come to light after the US Securities and Exchange Commission’s freeze on all Stanford assets, the UK government were aware that this "bank" was being monitored and were in fact monitoring SIB themselves. Barclays and HSBC are enormous banks with many more resources to hand than individual investors. Further, agreeing to be a correspondent bank for all Euro transactions with a bank outside of the EEA should add an additional responsibility to undertake thorough due diligence given the ability to transfer funds freely within the EU and EEA.

How was it possible for HSBC to have become the correspondent bank for all Sterling and Euro deposits given the exercise of due diligence expected from correspondent banking with offshore entities and the history that Allen Stanford had with the British banking authorities.

The Foreign and Commonwealth Office comments to the recent BBC Panorama programme on Alan Stanford said that the ‘UK government does take financial malpractice very seriously and issues regular advice on countries and jurisdictions where there may be serious deficiencies in regulation. It is for companies and the financial professionals they employ to act on this advice with all due diligence’. Presumably, the last part of this comment would apply Barclays and HSBC.

My instructions for the transfer of money was from Barclays to HSBC Bank in London Swift code MIDLGB22XXX For further credit to Stanford International Bank in Antigua (Sort Code 40-05-15) Account Number 58180160 Swift Code (SIBP AG AG) For final transfer to Mrs XXXXX Account Number 161xxx.

The money never reached Antigua but was transferred by HSBC to their bank in the Cayman Islands. The sort code given of 40-05-15 with the Swift code for SIB in Antigua (SIBP AG AG)is actually nothing to do with Stanford but is HSBC in the Cayman Islands. The misrepresentation of the sort code being part of Stanford International Bank along side the swift code should have raised alarm bells with HSBC had they were practiced “due diligence”. Where the money went from HSBC in the Cayman islands remains a mystery, but from the behaviour of HSBC they clearly know it was not sent as per my instructions to Antigua.

I hope HSBC are proud of their actions, and I would like the world to know how this bank has behaved towards a retired victim and many others who have lost their life savings possibly as a result of the actions of HSBC.