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HSBC Bankers Get No Jail Time for Terrorist Financing While Somali Sentenced for Charity Donation

HSBC Branch in Amman, Jordan (Flickr Photo by Travel Aficionado)

This past week, the Justice Department announced that HSBC Bank had agreed to forfeit $1.256 billion and “enter a deferred prosecution agreement” for engaging in money laundering that involved the financing of drug cartels and groups with ties to terrorism. The agreement indicated there would be no criminal prosecution. Not one bank executive or lower-level banker would be put on trial and possibly sentenced to jail for his or her role in allowing money to be transferred to drug cartels or terrorists.

Meanwhile, that same day, Nima Ali Yusuf, 26, a Somali woman who fled war-torn Somalia when she was a child, was sentenced to eight years in prison for sending $1,450 to “members of a terrorist organization in her native country.” The scale of the crime committed by Yusuf, who pled guilty to charges just over a year ago in December 2011, is incredibly minor and insignificant when compared to the acts engaged in by bank executives at HSBC.

Laid out in detail in a Senate report released in July of this year, HSBC was engaged in banking with the Al Rajhi Bank, which is run by members of the Al Rajhi family alleged to have been “major donors to al Qaeda or Islamic charities suspected of funding terrorism.” They established “their own nonprofit organizations in the United States that sent funds to terrorist organizations, or used Al Rajhi Bank itself to facilitate financial transactions for individuals or nonprofit organizations associated with terrorism” in the years after the September 11th attacks, according to the report.

In March 2002, the US Treasury Department conducted a “search of 14 interlocking business and nonprofit entities in Virginia associated with the SAAR Foundation, an Al Rajhi-related entity and the Al Rajhi family.

As outlined in the Senate report:

The SAAR Foundation is a Saudi-based nonprofit organization, founded by Sulaiman bin Abdul Aziz Al Rajhi in the 1970s, named after him, and used by him to support a variety of nonprofit endeavors, academic efforts, and businesses around the world. In 1983, the SAAR Foundation formed a Virginia corporation, SAAR Foundation, Inc., and operated it in the United States as a tax-exempt nonprofit organization under Section 501(c)(3) of the U.S. tax code. In 1996, another nonprofit organization was incorporated in Virginia called Safa Trust Inc. These and other nonprofit and business ventures associated with the Al Rajhi family shared personnel and office space, primarily in Herndon, Virginia. In 2000, SAAR Foundation Inc. was dissolved but the Safa Trust continued to operate.

An affidavit filed by the United States in support of the search warrant alleged that the Safa Group appeared to be involved with providing material support to terrorism. Among other matters, it alleged that members of the Safa Group had transferred “large amounts of funds …directly to terrorist-front organizations since the early 1990’s,” including a front group for the Palestinian Islamic Jihad-Shikaki Faction, a designated terrorist organization. but the Safa Trust continued to operate. It also detailed a $325,000 donation by the Safa Trust to a front group for Hamas, another designated terrorist organization. In addition, the affidavit expressed suspicion about a transfer of over $26 million from members of the Safa Group to two offshore entities in the Isle of Man. The affidavit further alleged that “one source of funds flowing through the Safa Group [was] from the wealthy Al-Rajhi family in Saudi Arabia.”

The search produced about 200 boxes of information which was then analyzed and used in other investigations and prosecutions, although neither the SAAR Foundation or Safa Trust has been charged with any wrongdoing. In 2003, Abdurahman Alamoudi, who had worked for SAAR Foundation Inc. from 1985 to 1990, as executive assistant to its president, pled guilty to plotting with Libya to assassinate the Saudi crown prince and was sentenced to 23 years in jail. He had also openly supported Hamas and Hezbollah, two terrorist organizations designated by the United States. According to an affidavit supporting the criminal complaint against him, Mr. Alamoudi admitted receiving $340,000 in sequentially numbered $100 bills from Libya while in London, and planned “to deposit the money in banks located in Saudi Arabia, from where he would feed it back in smaller sums into accounts in the United States.” According to the affidavit, he also admitted involvement in similar cash transactions involving sums in the range of $10,000 to $20,000.

Additionally, a key founder of the Al Rajhi Bank was one of twenty key terror financiers Osama bin Laden dubbed the “Golden Chain.”

The small sum of money Yusuf is alleged to have provided pales in comparison to the transactions highlighted above, which HSBC is believed to have enabled in part through its business with the Al Rajhi Bank.

Yusuf wrote a letter to the judge seeking to explain her contributions saying they were “motivated by a desire to provide food and medical care for those in need.” Her attorneys backed her up on this saying she had wanted to help “friends with living expenses and debt relief” and never intended to provide “direct support” to any members of al-Shabaab.

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Kevin Gosztola

Kevin Gosztola

Kevin Gosztola is managing editor of Shadowproof Press. He also produces and co-hosts the weekly podcast, "Unauthorized Disclosure."