When are white collar criminals not considered criminals?
Well, to U.S. Justice Department officials, it’s when they are executives of international mega banks. The banks pay a hefty fine but those in charge keep their jobs and huge salaries.
Last week the Justice Department announced a record $1.9 billion settlement against British bank HSBC (that, um, earned a profit of $17 billion last year) as punishment for laundering money for Iran, Libya and Mexico’s vicious drug cartels.
Yet, the HSBC executives remain at the helm of the bank, rather than in prison.
Neil Barofsky, a former federal prosecutor who served as inspector general for the Troubled Asset Relief Program, said big banks might interpret the Justice Department’s leniency as “a license to steal.”
Ya think? It’s outrageous. Neverthess, it is the approach taken. Some sarcastically refer to this as “Too big to jail.”
In this case, prosecutors claim they could not prove HSBC executives conspired to aid drug organizations or rogue nations.
And — here comes “Too big to jail” — the U.S. government feared prosecuting individual bank executives would cause “collateral consequences.” The concern is that without the top executives HSBC would collapse, causing tens of thousands of people to lose their jobs and hurt the economies of about 80 countries where it does business.
This is nothing new. Since 2009, several European banks have paid heavy settlements related to allegations they moved money for people or companies on the U.S. sanctions list: Switzerland’s Credit Suisse, $536 million; British bank Barclays, $298 million; British bank Lloyds, $350 million; Dutch bank ING, $619 million; and the Royal Bank of Scotland, $500 million for alleged money laundering at Dutch bank ABN Amro.
No jail. It’s apparently better to keep criminals on the job.
Really? Would a bank allow a teller who stuffed $10,000 in his pocket to pay a fine and report for work the next day?
“Shame on the Department of Justice. Shame on them,” said Jimmy Gurulé, a former federal prosecutor who teaches law at the University of Notre Dame. “These are actions that facilitated major international drug cartels to continue their operations. Now, if that doesn’t justify criminal prosecution, I can’t imagine a case that would.”
Perhaps this record-setting case has drawn enough attention to get the Justice Department to actually prosecute these criminals in the future.
U.S. Sen. Jeff Merkley, D-Ore., sent a letter to Attorney Eric Holder questioning the HSBC settlement.
It “appears to have firmly set the precedent that no bank, bank employee, or bank executive can be prosecuted even for serious criminal actions if that bank is a large, systemically important financial institution,” Merkley wrote.
It’s not much, but it’s a step toward infusing sanity to prosecution of bank executives gone bad.