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David Hodgkinson of Allied Irish Banks Julien Behal/PA Archive/Press Association Images
dirty money report

Irish banking officials named in US dirty money report

HSBC concealed more than $US16 billion in sensitive transactions to Iran, violating US transparency rules, a Senate panel says.

TWO SENIOR IRISH banking officials have been named in a US Senate report on money laundering at HSBC Bank.

AIB Chairman David Hodgkinson and NAMA adviser Michael Geoghegan, who previously worked at HSBC, were both mentioned in the 330 page document.

Both men are named in relation to ‘u-turn’ transaction with Iran, a country with which the US prohibits business dealings. These were used to allow US banks to process dollar payments involving Iran, but avoiding the country by starting and finishing the transactions elsewhere.

Despite reservations at the bank about the transactions and a deadline to stop them being set on December 31 2003, HSBC’s European division, of which Geoghegan was CEO,  continued to process Iranian transactions using cover payments and deleting any reference to Iran in the transactions. On Jun 30 2004, Hodgkinson, who was HSBC’s Middle East deputy chair, called on Geoghegan and asked for his “intervention and support.”

According to the senate report, the Midde East unit was then given a free hand or “dispensation” that allowed it to continue altering Iranian transactions until the end of 2004.

Geoghegan was told that the policy amounted to a “fudge” of the true nature of its dealings with Iran, by another executive, “to avoid the US embargo and seizure.”

According to the senate panel which released the report, HSBC and its US affiliate concealed more than $US16 billion in transactions with Iran in a six year period.

“From at least 2001 to 2007, two HSBC affiliates, HSBC Europe (HBEU) and HSBC Middle East (HBME), repeatedly sent u-turn transactions through HBUS without disclosing links to Iran, even though they knew HBUS required full transparency to process U-turns” the report  says.
“To avoid triggering the OFAC filter and an individualized review by HBUS, HBEU systematically altered transaction information to strip out any reference to Iran and characterized the transfers as between banks in approved jurisdictions.

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