The Washington Post recently reported that London-based bank HSBC set aside $1.5 billion to cover potential fines, settlements, and other expenses related to a money laundering probe by the Department of Justice (DOJ) and banking regulators. HSBC is facing both civil and criminal charges.
banking regulators primarily handled money-laundering investigations, but DOJ
has recently launched several of its own criminal cases under the Bank Secrecy Act (BSA). The
BSA requires financial institutions and their employees to combat money
laundering. Michael Dawson, managing director of Promontory Financial Group,
noted "the involvement of the Department of Justice in sanctions and
enforcement actions is much greater now than it was five years ago, and the
size of the fines has increased by a factor of 10 or more."
to the article, in 2010 DOJ fined Wachovia $110 million for violating the BSA
by failing to stop millions in Colombian and Mexican drug money from being
laundered through its bank accounts.
U.S. Treasury's Office of Foreign Assets Control (OFAC) has also increased
money laundering fines. In 2011, OFAC fined 21 companies a total of $91
million. Through October 2012, OFAC fined 11 companies a total of $623 million.
speculate that the agencies' increased money laundering focus is due to
congressional criticism that they were previously slow to act. Others posit
that resources were reallocated to deal with the financial crisis for the past