How Many Billions Of Drug-Laundered Money Does It Take To Shut Down A Bank?

Tyler Durden's picture

It's an odd question, we know - especially ahead of today's Stress Tests, but given today's testimony on assessing the bank secrecy act, apparent trouble-maker Elizabeth Warren pokes and prods (correctly we would add) at the surreality that exists between the Department of Justice, The Treasury, and the financial system. David Cohen, Tom Curry, and Jerome Powell dodged bullets and blame, "does that mean essentially we have a prosecution-free zone for large banks in America?" But Warren wasn't going to be fobbed off with useless banter as she pointed out, "if you're caught with an ounce of cocaine, the chances are good you're going to go to jail... for the rest of your life. But evidently, if you launder nearly a billion dollars for drug cartels and violate our international sanctions, your company pays a fine and you go home and sleep in your own bed at night - I think that's fundamentally wrong." Indeed Ms. Warren.


Here is the transcript - note the Treasury officials never actually answer anything...

WARREN: ... As Senator Reed just pointed out, the United States government takes money laundering very seriously for a very good reason. ...


Now in December, HSBC admitted to money laundering. To laundering $881 million that we know of for Mexican and Colombian drug cartels. And also admitted to violating our sanctions for Iran, Libya, Cuba, Burma, the Sudan. And they didn't do it just one time. It wasn't like a mistake. They did it over and over and over again across a period of years. And they were caught doing it. Warned not to do it. And kept right on doing it. And evidently making profits doing it.


Now HSBC paid a fine, but no one individual went to trial. No individual was banned from banking. And there was no hearing to consider shutting down HSBC's activities here in the United States. So what I'd like is, you're the experts on money laundering. I'd like your opinion. What does it take? How many billions of dollars do you have to launder for drug lords and how many economic sanctions do you have to violate before someone will consider shutting down a financial institution like this? Mr. Cohen, can we start with you?


COHEN: Certainly Senator. No question the activity that was the subject of the enforcement action against HSBC was egregious...


WARREN: But let me just move you along here on the point Mr. Cohen. My question is, given that this is what you did, what does it take to get you to move towards even a hearing? Even considering shutting down banking operations for money laundering?


COHEN: Senator, we at the Treasury Department under OFAC and (ph) authority, we don't have the authority to shut down a financial institution...


WARREN: I understand that. I'm asking, in your opinion, you are the ones who are supposed to be the experts on money laundering. You work with everyone else, including the Department of Justice. In your opinion, how many billions of dollars do you have to launder for drug lords, before somebody says, we're shutting you down?




WARREN: ... And I'm asking, what does it take, even to say, here's where the line is. We're going to draw a line here, and if you cross that line, you're at risk for having your bank closed?




COHEN: But I'm not going to get into some hypothetical line drawing exercise.


WARREN: Well it's somewhere beyond $881 million of drug money.


COHEN: Well Senator the actions, and I'm sure the regulators can address this issue. The actions that we took in the HSBC case, we thought were appropriate in that instance.




WARREN: So what you're saying to me is you are responsible for these banks, and again, I read your testimony and you talk about the importance of vigorous enforcement here. But you're telling me you have no view when it's appropriate to consider even a hearing to raise the question of whether or not these banks should have to close their operations when they engage in money laundering for drug cartels?




WARREN: I understand that I'm over my time. And I'll just say here, if you're caught with an ounce of cocaine, the chances are good you're going to go to jail. If it happens repeatedly you may go to jail for the rest of your life. But evidently, if you launder nearly a billion dollars for drug cartels and violate our international sanctions, your company pays a fine and you go home and sleep in your own bed at night. Every single individual associated with this. I just, I think that's fundamentally wrong.

(h/t Manal Mehta)

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mjorden's picture

 Elizabeth Warren, what can we do to help!?

knukles's picture

Come on, everybody knows that Wells, bout a year or so ago, plead one of them nolo contendre thingamjigs for massive money laundering as have a bazillion other banks a bazillion times over.
If there's no one to launder the money, the cash just gets caught outside the system....
Very very bad.
And only through a bank can it be reintroduced back into the system, become cleansed....
It is a part and parcel of modern finance.
Especially in the days of the big arms and nacro businesses... in which the nations sponsoring their banks facilitate the trades for their own fucking host governments. 
We exist and regulate you so you will do this under the aegis of the regulators and we will let you keep a taste.

Think Mena
Think BCCI... which was an official fucking appendage of the US Government for shits sake, people.

And PS, don't forget its a nice thing to have an internationally  recognized holier than Caesars wife institution that can wire money no questions asked anywhere anytime to anybody (aka Fed)

greased up deaf guy's picture

once again... talk is cheap. perp walks to a pound-me-in-the-ass prison would be a good start. paging bill black...

Stackers's picture

Too bad Ms. Warren is an elitest globalist socialist that came up with the "you didnt build that" line in the first place.

Harbanger's picture

She's a Big Govt., Constitution shredding, Progressive Indian chief and a fraud.  The fact that some people still fall for her theatrics is amazing.  She'd take away your rights and put a drone in your ass faster than Obama.

LetThemEatRand's picture

So you don't agree with everything she stands for, therefore she is useless (even though she is a lone voice calling out the banks).  Brilliant.  Divide and conquer does work.

DavidC's picture

Spot on.


AldousHuxley's picture





this is like asking....

"how many millions of civilian deaths does it take to shut down US military?"

"how many millions of child abuses and afterdeath heaven selling does it take to shut down churches?"

"how many millions of proven lies and false promises does it take to shut down congress?"


BUT....members of society can take a stand against offensive institutions to reign it back in.

WHEN HSBC gambles away military pensions, then you will see generals going after presidents.

AldousHuxley's picture

HSBC = HongKong Shanghai Banking Company



Established after the British established Hong Kong as a colony in the aftermath of the First Opium War


bank with roots in colonialism and drug wars supposed to feel guilty about drug money in Americas??????

Harbanger's picture

It's not divide and conquer my friend, that's what the left does, it's smoking out the traitors.

LetThemEatRand's picture

"It's not divide and conquer my friend, that's what the left does"

Thank you for making my point.

Terminus C's picture

The matrix is strong with that one Rand.

Raymond_K_Hessel's picture

If the government won't do anything to punish the TBTF/TBTJ institutions, why don't the people? We could boycott if Americans would rouse from their slumber.

YBNguy's picture

TD points out "get caught moving an ounce of coke go to jail, launder untold millions for cartels pay a fine." Its on par with Bloombergs recent, "if you owe the bank $50,000, you got a problem. If you owe the bank $50 million, they got a problem. And that’s a problem for the lenders." Which is just a rehash of Stalin's, "kill a dozen and it's a tragedy, kill a million and it's a statistic." I've termed this increasing scale of criminal acceptance "callous by scale theory." But is there a better term?

DaveyJones's picture

let me add that if a lawyer touches 10,000 cash and doesn't report it they get big problems fast and are usually thrown out of the industry, often prosecuted.

Unless of course that lawyer's client is the bank  

James_Cole's picture

"What does it take? How many billions of dollars do you have to launder for drug lords and how many economic sanctions do you have to violate before someone will consider shutting down a financial institution like this? Mr. Cohen, can we start with you?"

Finally someone (other than PBS) said it right to these guys faces - I don't watch American TV news but I hope they are showing this!

AldousHuxley's picture

there are lawyers practicing law

and there are "lawyers" in congress writing law.


Guess which lawyers were legally excempt from insider trading until recently?

Lord Of Finance's picture


What is with this divide and conquer bullshit? So because we all want to see the banksters end up in jail, do you think that will be the real "end". So, even if Warren is not pandering to the dummies, as I believe she is, and say she really wants to go after the banks, does that mean the ends justifies the means. To what end?  She is a socialist. I assume you are a bunch of occupy wall street/sympathisers then. If not, then you are even more clueless. This fight clubs purpose is not to bring down the fed, and the cartel, by any means necessary. You can not be so short sighted. What is the end that you wish to justify the means? Do you foolishly believe that the libertarian end and the socialist end are the same?

 You are quite oblivious to the fact that there is more to this end then meets your short sighted vision. You have a grave misunderstanding of the concept of "a house divided". Divide and conquer? Who says we are united? You halfwits only have half of the senario correct. The latter half of the scenario is, "what do we do after the fact?" That is the more important front, and on that end scenario, we greatly divided. We libertarians know very well that the end scenario is a return to free markets without government regulation. The free market has it's own governors to correct mistakes. The government regulation ties the hands of those governors causing all the market chaos we see. Divide and Conquer? Yeah. Those of us who know and understand history know the real meaning of that. You see? During the Bolshevic revolution, there were many fronts and groups to overthrow the establishment. The Bolshevics, led by Lenin with Trotsky as the mastermind, formed a united front with the other political underground and above ground groups. These foolish groups, some of which were similiar in philosophy to libertarians, decided to join Lenin and his footsoldiers under the same notion that, "a people united will not be defeated." They were short sighted in not understanding the Bolshevic end. They knew they had disagreements, but these useful idiots joined anyway under the same influence that you are advocating, and that is your mistaken notion of ,"a house divided" or more specifically, your claiming that we libertarians are falling for "divide and conquer tactics".

That is anything but the truth. You obviously do not know your history. Because after the bolshevic plot succeeded, the bolshevics had a dilemma. They now had their new political rivals to deal with. Divide and conquer was put into action. They targeted their new rivals and eliminated them. They sure did conquer. We are not allies. We are rivals. We will not fall for the same mistake that sooooo many others have done throughout history. Just look at Egypt. They had the same foolish misunderstanding of a house divided. They all thought they were on the same page. They all thought they had only one objective. The pro-democracy groups did not know their history. They became allies with the muslim brotherhood because they too were stupid enough to be pressured into the same fallacious notion of, "a house divided". I am sure many pro-democracy groups had reservations about joining alondside the brotherhood and the other islamic radicals. I am sure the radicals told them, "if you dont join with us, then you are dumbasses falling for divide and conquer tactics." They were stupid. They did not think about the "real end". Only the means. They now regret it. The same goes for Iran, in the late 70's, Libya, and many, many others throughout history. 

We know what the end is. We know  and understand the lessons of history.  You obviously do not. 


:"The end may justify the means, as long as there is something to justify the end . . . that which will lead to the liberation of mankind"


                  Leon Trotsky


    yeah. I'll let you liberals try and realize the true meaning of that. We libertarians and many conservatives understand what it means, but all your eyes read are words. Well, you do know the 'means', but you can never quite figure the true 'justification', therefore you do not understand the disastrous impact of that 'end'.


The banksters going to jail is not the real end.

RockyRacoon's picture

Look, we don't have Dr. Paul to ask the tough questions any more.  I'm glad to have somebody who is even more articulate than Dr. Paul to make some of these folks squirm.  If you have to have perfection then I'm afraid your standards are just too high.  Take what ya can get.

Harbanger's picture

She has nothing in common with Ron Paul.  She's a progressive socialist  and the antithesis of a libertarian like Paul, what part of that don't you understand.  Look at her stance on the 2nd amendment, our National budget and forcing churches to give birth control to their members against their religious beliefs.  What Constitution? She's a Statist, period end of story.  If you can't see that you're a fraud yourself.

fonzannoon's picture

I'm with you Harbinger.

I worked for a bank for 5 years a lifetime ago. Every year our continuing ed was always anti money laundering related. They made it absolutely clear that we needed to be on the lookout for money launderers. The training modules were hysterical. I am surprised at the end they did not say "if the client is attempting to wash through money in excess of _$$$$ please refer them to the wealth management and trusts department.

What a total fucking joke. This whole thing is a fuckin joke.

CheapBastard's picture

Take a car for a joy ride and go to jail for minimum 2 years.


Launder a Billion and pay a fine and go home and sleep in your own bed. Embezzle a Billion and buy RE in Cali and go home and sleep in your bed at night.....and it goes on and on.


It's a double standard and 99% are not in the "get outta jail free" 1%.

James_Cole's picture

"forcing churches to give birth control to their members against their religious beliefs."

Lol, oh the poor Catholic church, such an upstanding organization! However will they survive this injustice!

Today employee covered birth control healthcare plans, tomorrow prosecuting childrape...hell is breaking lose!

RockyRacoon's picture

They were already offering it -- before they were told they had to under the plans already in place.

So, they were for it before they were against it.   Go figger.

James_Cole's picture

Yeah, that was a non-issue goosed up to be a major attack against the constitution. I have a rule of thumb, the more coverage something gets in the press the less of an issue it is / the less something is covered in the press the bigger the issue.

I.e. HSBC drug money laundering / NDAA / Drone wars - hardly a discussion to be found anywhere. Catholic church contraception - endless heated debates.

LetThemEatRand's picture

I disagree with a lot of Ron Paul's positions, and even more so his son (who is a corporatist).  But I voted for Ron for President (write in) and I would probably vote for Rand if I could.  A Congress full of Pauls and Warrens would beat the living shit out of what we have now.  

fonzannoon's picture

LTER I agree with you about the whole divide and conquer stuff. I just want to eat my damn steak and go back to america's next top piece of shit already.

James_Cole's picture

Ron Paul is a mixed bag at best, Warren (though she hasn't done anything yet) seems to be the same. But so what? How about criticizing the rest of the congress who mostly range from abysmal to very abysmal and support the few times any of them take a good stand.

Can't stand Rand Paul, but his filibuster was absolutely the right thing to do and today it got a lot of press coverage and no doubt more than a few people who hand't been aware of the drone insanity got a whiff.

How about looking at what Warren said to these guys and argue whether it was a good or bad thing to do rather than start this useless argument over ad hominem attacks.

Harbanger's picture

Paul defends the Constitution, Warren uses it to forward her progressive agenda.  Keep it real, you either follow the Constitution or you don't.  She's doesn't, read her stance on issues, this is just typical progressive theather.  Good cop bad cop, it's getting old already, she's not really against the Banks, the Statist are working with the Bankers to enslave us all.

LetThemEatRand's picture

Keep it real?  How about keep it esoteric in a world that will never exist other than in your land of right and left and absolutes.  Carry on.  It's worked out so well thus far, what could go wrong?

The Shootist's picture

Don't sweat it Harbanger, I've had my fair share of down votes here on ZH. About the joos.

RockyRacoon's picture

She's not really against the banks?  That could very well be true in the broader sense, but appearances would say that she's not for the shitty banks.   And HSBC qualifies.   Calling them out is what this ZH article is about, and she did that.  All else aside, can we stay on point?

nmewn's picture


She called the regulators and government out for not pressing criminal charges. But her over-zealousness can have unintended statist consequences...true to all "progressive" attempts, the end result is often opposite or contradictory to stated objectives or intent.

It was her idea to have a Consumer Financial Protection Bureau...Dodd-Frank made it real.

The objective here (for all of us, including the younger among us) is to keep these fuckers as far away from our retirement funds as possible, not allow "government mission creep".

Offthebeach's picture

Retirement funds? You mean degrading Federal Reserve notes, promised specify....long time ago..
Seriously, who do you trust now s dsys? Clinton's, Bush, the Fed, cops, hospitals, the skools?

Pink slime and fiat.

Anusocracy's picture

I prefer freedom to the constitution.


fonzannoon's picture

Hey harbinger you have 20 upvotes and 20 downvotes above. That is tremendous. Way to make people think, whatever conclusions they come to. You stirred the pot. Nice job.

The Shootist's picture

She makes me puke. I've followed her empty suit forray into politics closely. She's an affirmative action hypocrite trying to appeal to 'occupy' liberals, because she runs in the PRM.

Whatever let them eat, you can go hang out with her and Obama.

Lord Of Finance's picture

Hey Harbanger. You are correct. But you are trying to reason with the reasonless. They have misconstrued thinking due to their deficient logic. You understand,they never will. They are infantile. They have the logical/intellectual intelligence of a 4 year old at best. 

  But those of us with right reason and wisdom appreciate people such as yourself to tell the real truth. I enjoy reading and seeing your well developed logic.

waterhorse's picture

There you go projecting again.  In your case, stupid just CAN'T be fixed.

Lord Of Finance's picture

Projecting what? Explain yourself! Explain how and what it is that I am "projecting". Do you even know the meaning of the word? Of course you don't. You are a dope and that is all your dimwitted brain could come up with. You just blurt out uninteligable thoughts that make sense to nobody but the other logically challenged bafoons on this site.


 Is that all you have to say? Is that all your deficient pre-frontal cortex could come up with? I write methodical, logical truths and give many factual historical examples and you blurt out some incomprehensible mumbo-jumbo.


   Do some studying of philosophy and history and train and exersize that useless lump of tissue you have for a brain before you respond to someone who is aware as myself.


You are a joke. A complete ignoramus. I know the other dummies on here will mostly agree with you because common logic is quite uncommon.


Go back to wall st. you infantile halfwit and finish your lame, unproductive sit in. Your are a dipshit!

richard in norway's picture

Yep, if I was an american living in mass I would have voted ron paul for pres and lizzy warren for senate. Guess that makes me a confused sob but I dont have time for ideological purity

nmewn's picture

I'm with Harbanger too.

She is NOT Libertarian, not by a long shot. Besides (and can we be frank amongst each other here for a moment?) she's a liar at best, an "affirmative action whore" at worst.

LetThemEatRand's picture

And how many libertarians currently hold national office who are swinging away at the banks right now?   When Rand Paul swings away at the drone wars, I applaud him even when I disagree with many of his other views.   I hope you find your perfect world some day, I really do.

Anusocracy's picture

Ron Paul did work with a few from the left side of the aisle.


LetThemEatRand's picture

One of the (many) reasons I voted for him.  He's an idealist who is also a pragmatist.

Buckaroo Banzai's picture

For the love of Pete, how on earth can you defend Princess Lie-awatha. She's a fucking post turtle if there ever was one. Fauxcahantas is CONTROLLED OPPOSITION. Wake the fuck up.