'Dr. Adams case' leads to investigation of HSBC banks - WTRF 7 News Sports Weather - Wheeling Steubenville

'Dr. Adams case' leads to investigation of HSBC banks

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At a press conference in New York, federal prosecutors outlined four felony criminal counts against HSBC's British and American banks.  The case started with U.S. Attorney William Ihlenfeld investigating Dr. Barton Adams of Vienna, West Virginia. 

As Ihlenfeld and his staff began to pull the threads of their case concerning Medicare fraud and tax evasion together, they realized they didn't have just a doctor committing crimes. 

"He took the money that he illegally obtained, and he laundered the money through bank accounts.  A lot of that money was laundered through banks, bank accounts at HSBC first in West Virginia, that's where the money would start," said Ihlenfeld. "Then it would go to Canada, it would go to The Philippines, and it would go to other countries."  

HSBC hadn't followed federal banking laws which should have alerted law enforcement to Dr. Adams's activities. 

"They had a major problem with their anti-money laundering program," Ihlenfeld said. "They weren't complying with the Bank Secrecy Act.  We identified those failures within their system." 

The "Dr. Adams' case" coming out of West Virginia escalated into a look by prosecutors at drug cartels sending money through HSBC, as well as nations like Cuba and Iran.  Notre Dame University Prof. Jimmy Gurule spoke to CBS Evening News about the nature of those banking crimes. 

"We're not talking about mere negligence," Gurule said. "We're talking about a criminal scheme that was adopted as a policy of HSBC to look the other way with regard to suspicious transactions involving money laundering."  

As a result of the criminal investigation, HSBC now has to forfeit $1.9 billion. The settlement represents one of the largest settlements in a criminal case in American justice system history.  Ihlenfeld maintains even though no individuals face criminal charges, HSBC executives do not "beat the rap." 

"They don't like the fact that they're going to be under such a close monitoring over the next five years.  There's so many different rules that they have to comply with, above and beyond already what they have to comply with, that it sends a strong message that 'If you're a bank and you don't play by the rules, you're going to be held accountable,'" Ihlenfeld said.