March 3, 2013

Marc Caputo: Break law, avoid jail? Be a ‘bankster’

A federal justice quiz — which merits a prison sentence:

A federal justice quiz — which merits a prison sentence:

1) Accepting at least $81,000 in secret money, breaking campaign-finance laws and conspiring with others to do so.

2) Violating the Bank Secrecy Act, Trading with the Enemies Act and other U.S. Sanctions that could have helped launder billions of dollars for Mexican drug lords and financial interests in state sponsors of terror such as Cuba and Iran.

It’s a no-brainer. Number 1 is a ticket to the slammer.

Just look at the difference in treatment between the cases involving Justin Lamar Sternad and HSBC Bank.

On Wednesday, Sternad is scheduled to plead guilty to three federal charges that he conspired with as-yet unnamed coconspirators to break campaign-finance laws and falsely file financial disclosures in his doomed campaign for Congressional District 26.

Meantime, the folks at HSBC suffered little despite running one of the most-corrupt banking operations the nation has seen in modern times. There’s a new term for these untouchable financiers: “banksters.”

Unlike Sternad, the “banksters” are too big to jail and often too big to prosecute in the federal system.

When banksters are caught committing billions of dollars of financial impropriety, the Obama-Holder Justice Department gives them what are called “deferred prosecution agreements.” The banksters admit some wrongdoing, pay fines (far smaller than the profits from their illegal activity), never go to trial and face no jail or prison time.

Sternad, linked to a scheme tied to former U.S. Rep. David Rivera, never had the chance of deferred prosecution. He’s too small. And that’s the lesson: if you commit a crime, do it with billions of dollars if you can.

Go big.

Be a bankster, not a gangster.

In explaining why HSBC escaped criminal prosecution, Assistant U.S. Attorney General Lanny Breuer essentially admitted he was worried about the effects on the economy.

“In trying to reach a result that’s fair and just and powerful, you also have to look at the collateral consequences,” Breuer said at a news conference last December announcing the deferred prosecution deal.

So justice isn’t blind when it comes to examining well-heeled bankers and the economy. No wonder banks are merging. Bankers won’t get prosecuted.

From a do-jail-time perspective, it’s essentially ok if, as HSBC admitted “at least $881 million in drug trafficking proceeds, including proceeds of drug trafficking by the Sinaloa Cartel in Mexico and the Norte del Valle Cartel in Colombia, were laundered through HSBC Bank USA without being detected.”

HSBC had to pay a $1.92 billion fine, about five weeks of income. Sternad could do up to five years in prison. He has been embarrassed, outed in The Miami Herald and El Nuevo Herald and then captured by 11 news cameras on the day he was charged, Feb. 22.

On the same day Sternad was charged, eight other defendants in unrelated cases also had hearings.

Two faced facing cocaine charges. If they were employees of HSBC as it helped drug traffickers profit, they might not have ever seen the inside of a courtroom.

Then there was Maximiliano Nestor Juarez, charged with bulk-cash smuggling for allegedly trying to hide $30,500 in cash, stuffed in a fanny pack, an envelope, his computer bag and in “a sock that was concealed in his groin area.”

Dealing in bulk cash is a “high risk” business that helps launder drug proceeds.

The leading bulk-cash business: HSBC’s Banknotes, which controlled about 60 percent of the world market at its height. Yet HSBC stopped monitoring many transactions and over a three-year period purchased “over $9.4 billion in physical U.S. dollars from HSBC Mexico,” the deferred prosecution agreement said.

Also, when it moved money around globally, HSBC disguised the source of the funds with messages like “do not mention Iran.”

So the bank engaged in at least $183 million in prohibited transactions with entities in Iran, and $30 million in Cuba in addition to hundreds of millions more in other state-sponsor-of-terror countries.

Of course, the differences between HSBC and Sternad’s case are huge: different prosecutors in different jurisdictions, different piles of evidence and, of course, different ramifications for prosecuting.

The volumes of cash and transgressions is not just staggering, it makes the sum funneled to Sternad look puny.

Sure, Sternad did wrong. He’s cooperating with investigators as they target former Rep. Rivera, said by witnesses to have aided his scheme. Rivera, who denies wrongdoing, hasn’t been charged. Unnamed co-conspirators gave Sternad cash and checks to help prop up his campaign, perhaps in an effort to undermine a rival of Rivera’s, Joe Garcia, who beat Sternad in the Aug. 14 Democratic primary and then bested the congressman in the general election.

By the November vote, The Miami Herald and El Nuevo Herald caught Sternad’s campaign misrepresenting its finances. The feds in the Southern District followed up and had a quick and easy case to prosecute, and they did it in what seems like record time.

Perhaps Sternad’s biggest fault, after committing the campaign-finance crimes, was that he was a night-time hotel worker. He’s a blue-collar nobody

If only he had been a bankster.

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