“Suspicious Activity” is an epic drama of intrigue, suspense, thrills, and legal combat—torn out of today’s headlines. “The purpose of the lawsuit is to fully expose the bank’s willing support to groups that are killing Americans—and others—overseas.” This announcement by attorney Nicholas “Deke” Deketomis sets up the gladiatorial arena between Big Banking and a team of well-meaning activist lawyers. Farron Cousins is joined by Mike Papantonio, along with attorney Chris Paulos, to discuss Pap’s new book, “Suspicious Activity,” which is a continuation of his Law and Disorder series.
Click here to order a copy of Mike Papantonio’s new book, “Suspicious Activity.”
Transcript:
*This transcript was generated by a third-party transcription software company, so please excuse any typos.
Chris Paulos: Unfortunately, banks are in a position to actually prevent terrorism and have made and taken steps where they have failed their duty, essentially. And the title of Suspicious Activity refers to one of the obligations that banks have to report suspicious activity of transactions that are flowing through their banks and through their correspondent banking accounts. And what we have seen time and time again, is banks actually taking affirmative steps to not report that suspicious activity, be willfully blind to it, and allow nefarious organizations, terrorist organizations, drug cartels and others to bank at their banks as customers and have beneficial ownership in accounts, and that goes unreported. And in some situations, these banks have actually established departments within those banks to specifically handle what they refer to as high risk customers, and to make sure that their transactions aren’t being flagged as suspicious so that regulators and the FBI and other, you know, the Department of Justice are able to prosecute them. So they have not only failed their duty, but they are now facilitating these types of actors and accessing funds needed for their illicit activities.
Farron Cousins: And there’s a good reason for that, right? You talk about these fines and a hundred million here, 500 million there, billions of dollars per year are going through these banks from these organizations. So, just so everyone is aware, this is not just one or two banks handling for one or two people. This is a well organized business for these individuals that carry out these attacks. Terrorism is a business and they run it like a business.
Mike Papantonio: It absolutely is. By the time the money comes out the other side, after it’s been laundered and washed by the bank, by the time the bank takes these transactions and they put distance between the dirty money and these complex layers of bank instruments, by the time that’s all over, you have organizations like Hamas that are able to pay for really sophisticated IEDs, for example. How do they go about doing that? Well, they have to have money to do it. In Chris’s case that we’re handled for this law firm, he was able to, we’re actually able to trace where did the money, where was it washed, what bank washed it? Why did it end up in this part of Afghanistan or Iraq? We can follow that all the way to the place that it killed somebody. And it’s done, there’s, we would like to think that it’s rare. It’s been going on for decades. And organizations like HSBC and Credit Suisse and Barclays and Deutsche Bank have allowed it to happen.
As a matter of fact, even after this company was hit for $1.9 billion, HSBC, they then jumped in again and the Guardian caught them doing exactly the same thing, this non-disclosure of suspicious activity, and to the tune of $4.2 billion. So the point is, what does it take to make them stop? These books that I write are, they’re a way for the public to, you can take a book, lay on a beach, read a good story, and at the same time, learn things that you’ve never heard before. Most people would never even dream that the drug cartels, for example, are getting all their money from, they’re washing all their money in banks, like I’m just naming to you. It’s so, it’s down to such a science that the Mexican drug cartels actually use boxes that are specifically customized to work at the tellers of HSBC and HSBC acts like, well, we don’t know what’s going on. But this case, the banking part of the case ended up in front of just a purely awful jurisdiction. Talk about that and what the judge’s decisions were on that.
Chris Paulos: So many of these cases are brought in the southern district or eastern District of New York, which are the backyards of many of these global banks and obviously the banks are vigorously defending them. And the bank cases at this point have gone up on appeal in order to get into the discovery phase. Several cases have made it through to the discovery phase, usually involving smaller banks or banks that are now defunct. But in terms of these global banks that have tentacles around the globe and banking branches around the globe that are predominantly used by these groups, they are at this point been able to shield themselves from discovery. On appeal right now is whether or not those cases can proceed in discovery. And we will see some decisions on that soon.
Nevertheless, what we are able to get in discovery from banks, like say Lebanese Canadian Bank and some other banks and banks that may have become under DOJ scrutiny and cooperated or reported suspicious activities, is that these banks are involved. Their accounts are connected, and they’re using them to mask the transactions. The more complicated they can make the transactions, the more distance, as Mike puts it, they can put between the bad guys and the seemingly legitimate purpose of these funds. And so, while banks have been somewhat successful at the early stages of avoiding discovery, I do think that we are gonna see that defense start to crumble and we will get into those accounts and be able to look at the data ourselves.
Mike Papantonio: So, what we’re doing, Farron, is we’re focusing now on Iran, for example. Okay, Iran is the hotbed for Hamas. I mean, that’s where the whole world of terrorism begins right there in Iran. And so we’re able to follow the money directly to Iran’s involvement with Hamas and terrorist groups. And he, we’re already getting hundreds of millions of dollars in decisions that run against these folks. But it’s gonna take a lot more. It’s gonna take the government actually being a little more involved. The Office of Comptrollers in this case, they knew about what was going on for a decade. They absolutely, absolutely no question about it knew that HSBC was washing money. They had every reason to understand it was for terrorism, and it was for drug cartels. Took no action whatsoever.
And when you look at it, when you follow any of these stories, like this story, everybody in the banking business understands the concept of suspicious activity. It’s a term that’s, it’s called SAR. You hear it all the time. They’re all trained in it. But these banks trained their people in a way to avoid actually reporting it. Or if they reported it, the report went away and hundreds and hundreds and hundreds of people either died or had their legs blown off, or their arms blown off because of the conduct of a bank like HSBC.
