HSBC allowing money laundering by Cartels, Islamic Terrorists

HSBC Eecutives testified at a hearing on Capitol Hill Tuesday.

NEW YORK (CNNMoney) — Global banking giant HSBC failed to prevent billions of dollars worth of money transfers that Senate investigators believe were linked to drug cartels and terrorist groups, according to a report released Monday.

The Senate’s Permanent Subcommittee on Investigations said London-based HSBC (HBC) failed to review thousands of suspicious transactions and properly vet clients over the past decade.

Among other issues, the report notes that in 2007 and 2008, HSBC’s Mexico unit shipped $7 billion in cash to the bank’s U.S. affiliate, a volume of shipments that law enforcement officials said could reach that size “only if they included illegal drug proceeds.”

HSBC Mexico had a number of high-profile clients linked to drug trafficking, the report says, as well as “a huge backlog of accounts marked for closure due to suspicious activity, but whose closures were delayed.”

The report also found that HSBC worked extensively with Saudi Arabia’s Al Rajhi Bank, some owners of which have been linked to terrorism financing, according to a CIA report quoted by the subcommittee. Some evidence suggests Al Rajhi’s “key founder” was “an early financial benefactor of al Qaeda,” the report says.

HSBC’s U.S. affiliate supplied Al Rajhi with nearly $1 billion worth of U.S. banknotes up to 2010, and also worked with two banks in Bangladesh that some evidence links to terrorism financing as well.

“From an oversight perspective, the failure of accountability here is dramatic,” said Sen. Carl Levin, chairman of the subcommittee.

The Department of Justice is also investigating HSBC over the issue. A DOJ spokeswoman declined to comment, citing the ongoing probe.

Wall Street’s latest sucker: Your hometown

The report also said HSBC’s U.S. affiliate handled nearly 25,000 transactions involving Iran between 2001 and 2007, despite U.S. sanctions against the country. Other HSBC affiliates making transfers to the U.S. frequently stripped information from the transactions that linked them to Iran in order to evade scrutiny.

Some HSBC executives in the U.S. were aware of this practice as far back as 2001, the report says. An outside review commissioned by HSBC found nearly $20 billion worth of transactions between 2001 and 2007 that may have been subject to U.S. sanctions.

The report came ahead of a hearing by the Senate subcommittee Tuesday that featured testimony from HSBC executives and government officials from the Treasury Department, the Department of Homeland Security and the Office of the Comptroller of the Currency.

Regulators also came in for criticism in the report — in particular, the OCC, HSBC’s primary overseer. The subcommittee said the OCC allowed HSBC’s anti-money laundering deficiencies “to fester for years” before finally taking action in 2010, requiring the bank to improve its internal controls.

“Its record of enforcement at HSBC resembles a lapdog rather than the watchdog that we sorely need,” Sen. Tom Coburn, the subcommittee’s ranking member, said Tuesday.

HSBC said in a statement ahead of the hearing that it “takes compliance with the law, wherever it operates, very seriously.”

“We will acknowledge that, in the past, we have sometimes failed to meet the standards that regulators and customers expect,” HSBC said. “We believe that this case history will provide important lessons for the whole industry in seeking to prevent illicit actors entering the global financial system.”

The bank added that it has beefed up its compliance efforts over the past year, increasing its due diligence requirements for affiliates and devoting more resources to the issue. Speaking at the hearing, HSBC compliance head David Bagley said he planned to step down as part of the reform process, although he will remain at the firm in a different capacity.

The Senate subcommittee noted that HSBC was “fully cooperative” with the investigation, providing documents from around the world beyond what was legally required.

Your Tax Dollars Supporting Shariah: Marine Can’t Challenge Shariah

But judges admit tax funds used ‘for arguably religious purposes’

Read this WND Exclusive to see how the present administration felt it necessary to bail out AIG after its fortunes were destroyed due to the company’s own recklessness and incredible acts. It is quite another thing to use U.S. taxpayer dollars to promote and support AIG’s Shariah businesses. Do you believe in the separation of Islam and State? Thinking Americans absolutely know that if the Catholic Church were seeking to impose their own brand of law on this nation for financial gain, the ACLU would be screaming from court to court, this is an outrage and violates our sacred understand of the separation of church and state. 

Make no mistake, this present administration is in bed with our enemies who seeking to destroy the very foundation of our republic. You need to read the following post.

A federal appeals court says a Marine can’t challenge a U.S. government subsidy for a program that promotes Shariah, that radical Islamic law that includes chopping off hands for theft and beheading for leaving Islam.

The ruling came today from Alan Norris, Eric Clay and Allen Griffin, judges on the 6th U.S. Circuit Court of Appeals.

They explained that the federal TARP funds given to AIG were exempt from such challenges because the authorizing legislation didn’t consider giving money to aid religious outreaches such as AIG’s Shariah programs, and that the money was directed there by “executive” decisions.

Thus, the taxpayer lacked “standing” even to complain about the issue.

And they came to their conclusion even though the court opinion admitted that shortly after the Treasury Department acquired an interest in AIG, the “department sponsored a conference entitled ‘Islamic Finance 101.’ The stated purpose of the conference was to provide government policymakers information about Islamic finance. The presentation materials from the conference discussed topics such as the source of Islamic finance, how Islamic finance works, and the market factors that caused its growth.”

The plaintiffs argued that Congress could or should have known its bailout money to AIG would go to Shariah “since AIG was well known as the leader in [Shariah complaint finance].”

No matter, the judges ruled, This “falls well short of supporting a reasonable inference of congressional intention that a portion of the [federal bailout money] might support [Shariah].”

The appeals judges affirmed an earlier decision from a trial court judge who concluded the $153 million of U.S. taxpayer money spent supporting Islamic Shariah really isn’t anything worth mentioning.

The case was filed against Treasury Secretary Timothy Geithner and others and is over the nation’s bailout with taxpayer money of AIG insurance, which operates multiple companies promoting Shariah-complaint insurance products.

The specific lawsuit was filed on behalf of taxpayer Kevin J. Murray over the bailout, which has involved billions of taxpayer dollars. It’s being handled by Robert Muise and David Yerushalmi of the American Freedom Law Center.

At the district court level, the case was dismissed by Judge Lawrence Zatkoff, who ruled that the case needed yet to prove that “the diverted funds were not de minimus in relation to the total amount…”

Read “The Stoning of Soraya M.” – the true story that inspired the movie

The Merriam-Webster dictionary defines de minimus as “so minor as to merit disregard,” but the plaintiffs attorneys noted in their appeal brief that “even the district court had to concede that after cash-strapped AIG received billions of dollars in taxpayer money … it provided two of its SCF [Shariah-compliant] subsidiaries with at least $153 million.”

The lawsuit alleges that the U.S. government’s takeover and financial bailout of AIG was in violation of the Establishment Clause of the First Amendment.

According to American Freedom Law Center’s investigation, AIG has five subsidiaries that promote and practice Shariah in Saudi Arabia, Malaysia, Bahrain and the United States.

Those companies hire Muslims to tell them how to meet the demands of Shariah, and the U.S. government has placed no controls over the billions of dollars in taxpayer money delivered to AIG.

Yerushalmi and Muise said they would appeal the case alleging the U.S. government’s takeover and financial bailout of AIG was in violation of the Establishment Clause of the First Amendment.

It claims specifically, at the time of the government bailout (beginning in September 2008 and continuing to the present), AIG was (and still is) the world leader in promoting Shariah-compliant insurance products. As the Sixth Circuit acknowledged in its opinion today, “‘Shariah’ refers to Islamic law based on the teachings of the Quran. It is the Islamic code embodying the way of life for Muslims and is intended to serve as the civic law in Muslim countries.”

As argued by AFLC, by propping up AIG with taxpayer funds, the U.S. government is directly and indirectly promoting Islam and, more troubling, Shariah. And as the Sixth Circuit noted in its opinion, Murray objects to his tax money being used to support Shariah because it “forms the basis for the global jihadist war against the West and the United States.”

Muise said, “This decision by the Sixth Circuit is troubling on many levels. First, it is contrary to controlling U.S. Supreme Court precedent, which allows a taxpayer to challenge a congressional spending program that violates the Establishment Clause. And second, this decision permits the federal government to continue its practice of promoting and supporting Shariah through the use of taxpayer funds. We intend to request a rehearing by the full court, and if that does not succeed, we will ask the U.S. Supreme Court to review the case.”

The court ruling admitted, “AIG subsidiaries ensure the Shariah-compliance of its SCF products by obtaining consultation from ‘Shariah Supervisory Committees.’ The members of these committees are authorities in Shariah law and oversee the implementation of SCF products by reviewing AIG’s operations, supervising the development of SCF products, and evaluating the compliance of these products with Shariah law.”

The court acknowledged that “AIG’s subsidiaries received a significant portion of the funds AIG received from the federal government” and that “[s]ix AIG subsidiaries have marketed and sold SCF products since AIG began receiving capital injections from the federal government.”

Yerushalmi said, “It is one thing that our government felt compelled to bail out AIG after its fortunes were destroyed due to the company’s own recklessness and bad acts. It is quite another thing to use U.S. taxpayer dollars to promote and support AIG’s Shariah businesses.”

Congressional Report: Hezbollah has “several thousand” donors in the USA

A report issued by the House Homeland Security Committee indicates that Hezbollah has a large and threatening presence inside the USA and is successfully raising funds inside the USA to support its Jihad. Among the findings outlined in the report which are particularly relevant for SFW readers:
• Counterterrorism officials consider Hezbollah fundraising cells to be prevalent across the United States.
• Sophisticated operations have been uncovered within large Lebanese communities in New York and Michigan, but also in other parts of the USA, such as Charlotte, NC.
• There is a general consensus among dozens of experts as well as current and former law enforcement and intelligence officials that Hezbollah, more than any other terrorist organization, is the most capable of transforming US-based fundraising cells into lethal terrorist cells at the order of the Iranian regime.
• There are likely several thousand sympathetic Hezbollah donors across America and hundreds of actual operatives.
• Some Hezbollah terrorists have been quietly convicted of fraud or other criminal activities and deported without their Hezbollah ties being publicly disclosed by federal prosecutors.

The entire preliminary Homeland Security Report report can be found here:

It is highly likely that donations to Hezbollah have come from the USA in the form of zakat payments. Regular readers of SFW will recall that zakat is a form of tithing required under Shariah. The problem with zakat however, is that numerous sources and authorities have confirmed that one of the destinations of zakat money is to those waging violent Jihad. We covered this in detail in a posting in October of 2011:

This is related to Shariah-compliant finance in that Shariah-compliant financial institutions are required to donate under zakat just as individuals are. There is an obvious moral hazard involved.

Another Hedge Fund Company Goes Shariah-Compliant

Thanks to Allyson Taylor for calling our attention to this development.

Passport Capital of San Francisco, a hedge fund company, recently invested in Shuaa Capital in the UAE, a Shariah Compliant financial organization.

Staying true to the lack of disclosure rampant in the Shariah-Compliant Finance industry, no mention has been made of this on Passport’s American web site…

Dubai Picking Up Mantle of World Financial Capital

by David Westley on Saturday, 24 May 2008

The new mantra in New York and London is “Dubai, Mumbai, Shanghai or goodbye”, as job losses mount in both cities while opportunities in the east continue to rise.

Lehman Brothers on Tuesday became the latest investment bank moving one of its most senior positions to the UAE. Philip Lynch, the bank’s co-head of equities for Europe and the Middle East, will be relocating to Dubai after serving more than two decades in London.

The US investment bank, which has axed over 6,000 staff in the last nine months, said the move was aimed at serving the growing needs of clients in the Gulf region and the wider Middle East.

Lynch will find himself in good company. Barclays last month dispatched Roger Jenkins, one of London’s highest-paid bankers, to the emirate as chairman of investment banking and investment management.

Earlier in May Citigroup, which has so far cut 1,500 jobs because of the global credit crisis, announced it would send Alberto Verme, co-head of global investment banking from London to Dubai.

He follows Makram Azar, head of the media, consumer and retail investment banking team in Europe and the Middle East, to take the role of global head of sovereign wealth funds.

The bank has also switched Perry Hoffmeister, co-head of investment banking for Europe and the Middle East, to run its investment management arm across the same regions.

The relocation of roles from London and New York to Dubai, and to a lesser extent Mumbai and Shanghai, reflects the reshaping of global opportunities for investment banks.

With a surge in oil revenue, rapidly rising infrastructure needs, and the emergence of sovereign wealth funds at the head of M&A activity, the Middle East and Asia have become crucial for global investment banks looking to remain profitable.

Vikram Pandit, Citigroup’s chief executive, is on record as saying the Middle East is the bank’s priority in its focus on growth opportunities overseas.

Countries in the GCC will spend $1.5 trillion on infrastructure in the five years, according to figures published by Société Générale Asset Management, based on research by HSBC Global Research, Middle East Business Intelligence and Thomson Datastream.

Cerulli Associates, a US and Singapore-based research firm, estimated total managed assets in the six GCC countries and Egypt to be more than $1.6 trillion at the end of last year.


America for Sale – Must Read!



America for Sale

Dr. Rachel Ehrenfeld and Alyssa A. Lappen

Posted 04/01/2008 ET




As the U.S. and Western markets plummet and the U.S. dollar continues its free fall, sovereign wealth funds (SWF) gobble up prime financial institutions, industries and real estate in the U.S. and the West. Given concerns regarding the political influence of such wealth, the U.S. Treasury, together with Abu Dhabi and Singapore, on March 20 signed an “Agreement on Principles for Sovereign Wealth Fund Investment.”


“SWF investment decisions should be based solely on commercial grounds, rather than to advance, directly or indirectly, the geopolitical goals of the controlling government,” according to the joint statement and accompanying policy principles. Feebly attempting to enforce this standard, it declared: “SWFs should make this statement formally as part of their basic investment management policies.”Meanwhile, the International Monetary Fund (IMF) Board of Directors on March 21 endorsed an SWF work agenda to develop — in coordination with them and the Organization for Economic Cooperation and Development (OECD) –“a set of voluntary best practices.”


The pretense surrounding most international agreements matches the deceitful promotion of Middle Eastern SWF investments and Islamic banking as “ethical and socially responsible.”


In fact, “Islamic banking defies the separation between economics and religion,” according to USC King Faisal professor of Islamic Thought Timur Kuran.


Globally, SWFs now hold some $2 to $3 trillion and are expected to reach $6 to $10 trillion “within five years.” Incredibly, IMF Monetary and Capital Markets director Jaime Caruana expects the planned “best practices” to “cover issues of public governance, transparency, and accountability principles” and “help ease concerns about SWFs in recipient countries and contribute to an open global monetary and financial system.”


High oil prices are responsible for the enormous growth of most SWFs, including those in the Middle East. According to a new the Asian Banker research group, ”the world’s 100 largest Islamic banks have outpaced conventional banks with an annual asset growth rate of 26.7 per cent (nearly $350 billion) in assets.”


In addition to huge political and economic influence such wealth carries, and in contrast with IMF wishful thinking, Middle Eastern SWFs also seek to impose the strangulating governance and eventual bondage of Islamic laws — not “ethics” or “social responsibility” as they advertise.


Middle East sovereign funds include bans on trade with Israel, despite U.S. laws prohibiting such boycotts and World Trade Organization (WTO) regulations requiring all member nations to allow free trade with each other. Yet, Middle East wealth so dazzles Western governments, including the U.S, that they readily ignore the Islamic nations’ illegal boycott. While these funds for now only target Israeli products, ultimately Western industries and economies will also endure dire effects.


The U.K. Trade and Investment (UKTI) website openly notes, “Saudi Arabia imposes no foreign exchange controls and no other restrictions on the repatriation of profits or capital by foreign investors,” except a strict ban “against transactions with Israel.”


The UKTI website also warns British businessmen of similar prohibitions in the United Arab Emirates (UAE), Bahrain, Kuwait, Qatar and Oman, among others, against goods “manufactured in Israel.”


The growing U.S. and European financial crisis gives Islamic banking and shari’a finance proponents increasing leverage over Western markets and economics. In reality, their acquisitions of ever-larger stakes in U.S. and Western strategic financial and other assets, amounts to economic warfare against the West.


They lure U.S. and Western investors into high-rate sukuk or al-ijara Islamic bonds, which they claim are “alternative” Islamic finance instruments that supposedly avoid usury, but use Western structured finance tools-”some of the most complex ever created.”


Shari’a instruments transform liquid, traceable cash flows from interest-bearing debt into illiquid assets. They resemble “portfolio insurance” that caused the 1987 crash, and the mortgage-backed bonds behind the 1994 bond-market bust that eviscerated $1 trillion in value — then some 10% of the U.S. bond market. Those collapses damaged many huge pension funds, municipalities and institutional investors, and killed off several hedge funds.


Shari’a economics’ dubious ethical and financial values nevertheless continue attracting Western bankers and academics. In a March 5, 2008 missive to international business leaders, for example, Caux Round Table (CRT) global executive director Stephen B. Young even suggests that Islam Hadhari (“civilizational Islam” based on shari’a law, as promoted by the Muslim Brotherhood) can resolve America’s conflicts with the “Muslim ummah” (nation).


Young believes “Islamic Banking would … bring modern forms of private sector led economic development into Muslims societies,” ushering them into the “industrial and post-industrial revolutions,” by constructively blending “rational economic considerations with Qur’anic piety.” Yet he relies on a 2006 script by Malaysia’s Prime Minister Dato’ Seri Abdullah bin Haji Ahmad Badawi.


But “Islamic economics is an invented tradition,” writes USC’s Timur Kuran. “Neither classical nor medieval Islamic civilization featured modern style, much less Islamic banks.”


Far from developing Islamic and economies, shari’a law has overall retarded them. “To one degree or another, most of today’s 56 predominantly Muslim countries are economically underdeveloped,” Kuran writes.


Islamic finance deliberately promotes fundamentalism and anti-Western behavior throughout the Muslim world, rather than suppressing it, he argues. Neither have shari’a finance proponents in the West considered its economic effects — promotion of gender discrimination, replacement of secular law and schools with Islamic law and schools, and its institutional suppression of scientific investigation.


In December 2007, Bourse Dubai, the world’s first and largest Islamic equity exchange, bought 20% of NASDAQ, the biggest U.S. electronic stock market, and “rebranded” it as part of Dubai’s company. The Bourse also got NASDAQ’s 28% of the London Stock Exchange (LSE). In addition, Qatar acquired a 24% LSE stake, giving the two Gulf nations control over nearly 52% of the London exchange. On March 15, Iran, which now dominates the leading 100 Islamic banks — followed by Saudi Arabia, Malaysia and the UAE –announced plans to list $90 billion energy holding company on Dubai International Financial Exchange, (DIFX), which is wholly owned by Bourse Dubai.


To counter the Shari’a financing takeover of America, the FTSE CSAG Terror-Free Index Series and Conflict Securities Advisory Group, yesterday launched a new index that screens out some 600 companies doing business with Iran, Sudan, Syria and North Korea. The U.S. government designates these states as sponsors of terrorism. However, the major Shari’a finance institutions are in Saudi Arabia, the UAE and other Gulf states  – all funders of radical Islamist and terrorist groups worldwide, and none designated by the U.S. or screened by the new index.


The one who pays the piper calls the tune, goes the saying. Considering the strategic purchases of Middle Eastern sovereign wealth funds and the traps built into shari’a financing, the U.S. and the West may soon be dancing to an unfamiliar — and strategically damaging — Islamic tune.Dr. Rachel Ehrenfeld is director of the American Center for Democracy (ACD and member of the Committee on the Present Danger. Alyssa A. Lappen, Senior Fellow at the ACD, is a former editor for Forbes, Corporate Finance, Working Woman and Institutional Investor.



The New York Post has reported that the Chrysler Building (New York) is now in the happy hands of the Abu Dhabi Investment Council.