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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I am a Man I am Forty's picture

I'll bite, he was never actually a "progressive academic humanist" and he just acted like one to get elected?

newengland's picture

Damn right, Ms Warren. It is un-american and just plain wrong for HSBC a foreign bank to get away with its cynical acts.


Meanwhile, MA has a useless bureaucratic health care 'system', costing most people most while CONgress is excused.

Get your house in order.

CharliePrince's picture

BCCI  use to launder some of thier money thru the cbot   bond floor.. i was a phone clerk for merrill .


some girl from london would call and buy or sell  thousands of option contracts.   later that day  they would cover all

thru a different brokerage house.  i use to try to show them things  but the girl said  thank you

but were not interested....  its only drug money ---sic

deerhunter's picture

My brother was driving a commercial truck for a nursery operation in Michigan.  He had 8 grand cash on him for shrubs he was picking up in W VA.  He was stopped and the state police confiscated his cash.  He had a tailight out but seems carrying that kind of cash is now illegal in Amerika.  It took his company 3 trips to Ohio courts to get their cash back.  Three overnight hotel stays and lost time with no compensation.  And HSBC does this.  How do we help her??? She may have more than a boating accident if she keeps this up.

newengland's picture

Yep. Nicey words from statist thieves will bury them. Whores, they are.

nmewn's picture

I would highly advise that you NOT offer anything but support for EXISTING law on the books...otherwise your brother may find himself walking in the snow without a truck and his company making mutiple trips to Ohio to get both the company's money & the truck back next time.

One of the ways the state grows is through duplication & extension of EXISTING law.

If I hear anyone saying..."There should be a law against...X" one more time, I'll have to shoot them ;-)

Nimby's picture

She's a whore for the establishment.  She's doing her best human impersonation for the cameras.  Nothing else.

Buckaroo Banzai's picture

Princess Liawatha is controlled opposition.

Makes for nice sound bites though!

GrinandBearit's picture

"Fuck Casper Gomez, fuck the fuckin' Diaz brothers... FUCK EM ALL!... I buried those cock-a-roaches."


luckylogger's picture

If we ever get thru this and actually shoot or put away the ceo's of the banks that did all this shit, the sooner that we get on with our economy and start amking money legally and main street takes off. Until then us "little people are fuked". Warren is the only one looking out for us........... I do not care if you are republican, democrt... etc.

Elizabeth rocks !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

newengland's picture

Frankly, my dear, I don't give a damn.

It infuriates me that CONgress supports the NDAA.

Elizabeth will anwer to the Commonwealth. Our country and Constitution.

GMadScientist's picture

Another round of applause erupts from the Kabuki theater fans.

digalert's picture

+1 Ms Warren, all you need is one criminal indictment, and not some scapegoat Madoff grifter. Go for a big fish like Dimon or Blankfein. You don't even need to shut their banks down. Just slap'em with some matching chrome bracelets and leg shackles.That'll put the fear in the rest of them banksters.

Umh's picture

Give them golden shackles if it will keep them controlled. I mean real shackles where they are attached to the floor and cannot move, but the gold will be pretty! And, I bet it shines after they tug on it for years.

Smuckers's picture

People with no homes, no jobs, on foodstamps -
For fuck sakes people will soon start carrying an ounce of coke just to get a bed and 3 square meals a day for several years.

Crash Overide's picture

It's a whole different level/market that the CIA drug cartels operate on. The war on drugs is a profit center for the military industrial complex, somebody has to clean the money Senator, why do you even ask about this? Everyone knows what the score here is, been that way for years...

I applaud her intelligent questioning.

newengland's picture

She is naive. Not a bad girl.

ChanceIs's picture

I will be calling my Congresscritter to ask for an independent counsel.  (Is that law still on the books?)

We have never been told why Lanny Breuer left so abruptly.  I am sure that it was to spend more time with his family.  One would have hoped that Holder gave him the gate after the tripe he offered about not prosecuting to not upset the banking system.  It was perfect.  You know......"That Lanny is a good person.  He tries so hard.  But he really did get a little too carried away.  He wanted justice for everyone."  What do they call that...bag man....water carrier.....fall for the team?

But then Holder comes out pleading the same BS.  Idiot!!!!

Holder is not what one would call being in a totally unconflicted position given some of the clients he represented before taking the AG's office.  GeeZee PeeZee.  Even Gary Gensler recused himself against investigating Jon Corzine due to their previous business relationship.  Holder is embarrassing the Prez big time.  I don't think Obama realizes that Holder is making him look to be the fool as well.

Elizabeth Warren is OK - despite all of her gaming of the system with her DNA.  For sure the establishment wanted her shut up.  Witness giving her that hokey position in the basement of Treasury where she had to hear the water run every time Geithner flushed his commode.  Regardless, she is one of a bare handful asking embarrassing in prime time.  We did have a few scathing letters from Senators to Holder.  What was the response to those......"only if the drug smuggling bankers pose a clear and present danger."  Besides, working on Capital Hill can actually be a stressful 24/7 job, and they need all of those toots to remain alert.

monkman's picture

It was wrong, as in past tense, Ms Warren. Now, we're the USSA, today this how we roll.

lolmao500's picture

The video...

How long before she commits suicide with 5 bullets in the head, one in the back with her hands tied?

newengland's picture

Over your dead body.

Do not threaten the Commonwealth, and our Elizabeth.

Back down or bleed. Your choice.

BGO's picture

this story..... a while back i heard when the banks got caught, they supposedly laundered hundreds of billion$. now the hundreds of billions is down to $900 million? either the numbers from before were way off, whoever does whatshername's calculations is bad at math, or someone is trying to make the whole govt sponsored money laundering debacle look a lot less bad. 

TNTARG's picture

"The war on drugs is a profit center for the military industrial complex,"

That's why Evo Morales kicked DEA's ass out of Bolivia.

newengland's picture

OK, Nazis. Game on

Stay away from Elizabeth.

Colonial Intent's picture

Fox news says warren is bad person, fox viewers have pavlovian response, cant believe these people still post fox news as a source.

WTF_247's picture

I must say, she seems to be one of the only few who actually are trying to make a difference when it comes to the outright illegal behavior that goes on - when she got elected I figured she would just be another of the libtards who strives for more spending, more taxes, more deficits dont matter bullcrap.  

I am very surprised that out of the gate she has attacked the status quo several times - and makes a hell of a good case.  I hope she keeps going and does not get "tamed".  I am sure the establishement is working on her now aggressively.  

She should be looking to hire both a food tester and a "preventative" brake mechanic ....

newengland's picture

She is naive, not bad.


Bad people ought to back off. Do not threaten Elizabeth.

Umh's picture

Will she do more harm than good?

Will she do more good than harm?



I'll bet they use her to make things worse for us and better for the banks.

Carnac says: the government can do a better job than you can managing your retirement money. To me that just means we will all go down together; that's fair, right? Fuck fair! Fair is just a way to make us all pay for idiots' mistakes. Which really means that idoits have no reasons to learn anything.

Xue's picture

Drug dealing is precisely what made HSBC so prosperous, remember the opium wars? HSBC can't help it, it's part of its bank DNA, it would be like asking a Chinese official not to be corrupted : impossible.

Crash Overide's picture

Makes me sick every time I remember the HSBC "fine" and pot smokers are doing time.  

Hypocrisy and fraud in everything. Truth is treson in the empire of lies.

newengland's picture

Opium wars Then and now.

Monedas's picture

The biggest crime is theft by fiat, theft by taxation and slavery by regulation .... and Elizabeth Warren is all in .... drug money is pocket change !

Mr. Hudson's picture

A "Cohen" at the Treasury Department? You've got to be kidding!

Kirk2NCC1701's picture

Sometimes, it's 'How you see the problem...'

Has anyone else realized -- besides HSBC, the Fed and the DOJ -- that all this drug money eventually makes its way back to the big banks, and into Fed Bonds and T-bills?  Even dirty/drug money has a chance of getting into money-heaven, with the blessing and forgiveness of its sins by its high priests.  Along its travels it touches and nourishes many lives. 

In the words of a Colombian drug lord:  "Donde esta el problem, Gringo?"  /sarc


newengland's picture

De donde es usted. Keep away from our Elizabeth. Back off or bleed.

Dingleberry's picture

So is she going to accidentally drown in a hot tub, cut her self shaving her legs and bleed to death or something like that? Since she doesn't have a schlong, I doubt there will be a honey trap ala Spitzer. 


Remember, even though she is a libtard, your enemy's (the banksters) enemy (Liz) your friend.

Trucker Glock's picture

she's pissed. are the cartels cutting into her tribe's casino profits or something?



samsara's picture

Here's Cathrine Austin Fitts about;

Click on the Link to see the picture of  Grasso huging the FARC leader

The Real Deal: The Ultimate New Business Cold Call -- NYSE Grasso and the FARC rebels in Columbia 


A Real World Example:

NYSE's Richard Grasso and the Ultimate New Business "Cold Call"

Lest you think that my comment about the New York Stock Exchange is too strong, let's look at one event that occurred before our "war on drugs" went into high gear through Plan Colombia, banging heads over narco dollar market share in Latin America.

In late June 1999, numerous news services, including Associated Press, reported that Richard Grasso, Chairman of the New York Stock Exchange flew to Colombia to meet with a spokesperson for Raul Reyes of the Revolutionary Armed Forces of Columbia (FARC), the supposed "narco terrorists" with whom we are now at war.

The purpose of the trip was "to bring a message of cooperation from U.S. financial services" and to discuss foreign investment and the future role of U.S. businesses in Colombia.

Some reading in between the lines said to me that Grasso's mission related to the continued circulation of cocaine capital through the US financial system. FARC, the Colombian rebels, were circulating their profits back into local development without the assistance of the American banking and investment system. Worse yet for the outlook for the US stock market's strength from $500 billion - $1 trillion in annual money laundering - FARC was calling for the decriminalization of cocaine.

To understand the threat of decriminalization of the drug trade, just go back to your Sam and Dave estimate and recalculate the numbers given what decriminalization does to drive BIG PERCENT back to SLIM PERCENT and what that means to Wall Street and Washington's cash flows. No narco dollars, no reinvestment into the stock markets, no campaign contributions.

It was only a few days after Grasso's trip that BBC News reported a General Accounting Office (GAO) report to Congress as saying: "Colombia's cocaine and heroin production is set to rise by as much as 50 percent as the U.S. backed drug war flounders, due largely to the growing strength of Marxist rebels"

I deduced from this incident that the liquidity of the NY Stock Exchange was sufficiently dependent on high margin cocaine profits (BIG PERCENT) that the Chairman of the New York Stock Exchange was willing for Associated Press to acknowledge he is making "cold calls" in rebel controlled peace zones in Colombian villages. "Cold calls" is what we used to call new business visits we would pay to people we had not yet done business with when I was on Wall Street.

I presume Grasso's trip was not successful in turning the cash flow tide. Hence, Plan Colombia is proceeding apace to try to move narco deposits out of FARC's control and back to the control of our traditional allies and, even if that does not work, to move Citibank's market share and that of the other large US banks and financial institutions steadily up in Latin America.

Buy Banamex anyone?



...come back tomorrow for Part 4 of Narco-Dollars for Dummies.




The Heart's picture


This may be nothing, but there seems to be a not so nice country going around and placing links on certain web sites to put Trojans on ones computer.

It is called Win.Trojan.Swrort-3602.

It looks chinese.

Run a scan with a free Clam anti-virus to check if your machine has it.

Here is the report from Clam:

c drive: \Program Files\Mozilla Firefox\firefox.exe: Win.Trojan.Swrort-3602 FOUND

c drive\System Volume Information\: Win.Trojan.Swrort-3602 FOUND

Free Clam Anti-Virus:

Atomizer's picture

We have a new variant of Conficker botnet. Alphabet soup agency thought the DNS scan isolated malware. Due to the voluntary comp check, your government IP check breeded new malware improvements.. Program was tweaked.


At the end of day, the current US government administration will be caught modifying malware to pass new laws. Mark my words. Computer code never lies.

Bingfa's picture

They got they're hand in everything else...

Who would second guess these homicidal maniacs?

               Everything is an Hollwood set with the brain dead Liberals just chugging the whole thing down.

Atomizer's picture

Wachovia aka Narchovia Bank was deemed too big to bring down. Taxpayers funded the buyout.


How a big US bank laundered billions from Mexico's murderous drug gangs -2006

Connect the Eric Holder dots.

the grateful unemployed's picture

a lot of those taxpayers put the blow up their noses too

Vidar's picture

"Money laundering" just like drug possession or distribution, is a non-crime created by the state. All of these non-crimes are actually violations of arbitrary rules, the real criminals are the ones making these rules, the politicians and the bureaucrats.

I am no fan of the TBTF system, but the way to end TBTF is to End the Fed and return to commodity money, not by enforcing laws the very existence of which is a violation of human rights. If Senator Warren is concerned about people going to jail for cocaine, she should work to legalize cocaine (and all other drugs). That is the solution, not prosecuting anyone for the violation of arbitrary rules, whether they be banking executives or entrepreneurs working in black market industries such as recreational drug distribution.

GMadScientist's picture

Bingo; they're just insuring their continued ability to play the invented arbitrage.

But since we're on the subject, which rules aren't "arbitrary"?

Umh's picture

Gravity comes to my mind and laws against murder, theft, battery, rape..., but yes many rules are arbitrary like the tax code.

GMadScientist's picture

Just trying to get a little natural law philosophical discussion kindled...physical laws I'll accept, but all the rest are negotiable.

Murder becomes 'warfare' and you get medals for it.

Theft becomes 'appropriation' or 'war reparations'.

Battery becomes 'discipline' or 'enforcing the law' (ask anyone who's mouthed off to a cop at the wrong time).