As the HSBC Whistleblower, I observed blatant and systematic violations of U.S. Anti-Money Laundering laws and a 2010 Cease and Desist Order – violations that I believe continue to this day.
While HSBC attempted to make it appear that it was in compliance with U.S. Anti-Money laundering laws and the 2010 Cease and Desist Order, it was, in fact, engaged in a widespread scheme to evade those restrictions and approve massive amounts of illegal financial transactions to boost bank profits....
The illegal conduct resulted in HSBC’s blatant participation in, and enabling of, drug trafficking, terrorist activities and the channeling of money to sanctioned regimes abroad.
Stern reported his findings to his superiors at HSBC and was at various times ignored, taunted, ridiculed and ultimately forced out.
Stern also reported this information to the CIA and the FBI.
Although HSBC entered into five Settlement Agreements with five different U.S. government agencies on December 11, 2012, pursuant to which HSBC agreed to pay $1.92 billion in fines and penalties, those Settlement Agreements do not release the specific illegal conduct Stern complains of and reports herein, and pertain generally to conduct that occurred prior to Stern’s employment with HSBC....
In June of 2011, as the specialist on the Middle East, Stern discovered that a number of the former HSBC debt collectors who were appointed AML Compliance Officers were approving transactions going to foundations in the Gaza Strip.
Stern reported this to his superiors, and warned that Hamas, which the U.S. State Department has deemed a terrorist organization, is the elected government of Gaza and that this money could be used to fund terrorism.
He did so by sending an email titled “Compliance Error” to Jeff Kraft and Luis Viteri (attached as Exhibit 4).
Subsequently, Jeff Kraft pulled Stern into a conference room and threatened to fire him.
Kraft stated, “Do you know what would happen if the government found out about the Compliance Error email? They would shut us down.
"Do you f---ing understand we are under a cease and desist order and you are putting in writing that we have a compliance error!?
"Gary Peterson would fire you in two seconds if he found out about this.”
When Stern tried to explain the situation to Kraft, Kraft stated, “Hamas is not a terrorist organization – they were elected to power.”