A federally appointed overseer at
PLC flagged suspicious transactions in the accounts of Huawei Technologies Co. to prosecutors seeking the extradition of the Chinese company’s finance chief, people familiar with the matter said.
A monitor charged with evaluating HSBC’s anti-money-laundering and sanctions controls in recent years relayed information about the Huawei transactions to federal prosecutors in the Eastern District of New York, the people said.
Canadian authorities on Dec. 1 arrested Huawei Chief Financial Officer Meng Wanzhou in Vancouver at the request of the U.S. for alleged violations of Iran sanctions, the latest move by Washington against the Chinese cellular-technology giant. The U.S. is seeking Ms. Meng’s extradition so she can appear in federal court in the Eastern District, The Wall Street Journal has reported.
HSBC, one of several banks that did business with Huawei, is cooperating with investigators and isn’t a target in the Huawei probe, some of the people said. The British bank until recently was being formally monitored for its controls meant to catch money laundering and sanctions violations under a 2012 agreement with U.S. prosecutors.
The Journal reported in April that the Justice Department had launched a criminal probe into Huawei’s dealings in Iran, following administrative subpoenas on sanctions-related issues from both the Commerce Department and the Treasury Department’s Office of Foreign Assets Control.
Ms. Meng’s arrest has rattled global markets. U.S. stocks fell sharply on Thursday on fears that the incident could escalate tensions between the world’s two largest economies, which recently reached a detente in their trade dispute. Ms. Meng is the daughter of Huawei’s founder, Ren Zhengfei.
- Meng Wanzhou, Huawei CFO and Founder’s Daughter, Was Face of Secretive Company (Dec. 6)
- Senior Huawei Executive’s Arrest Steps Up U.S.-China Confrontation (Dec. 6)
- Canadian Authorities Arrest CFO of Huawei Technologies at U.S. Request (Dec. 5)
- Washington Asks Allies to Drop Huawei (Nov. 23)
- Huawei Under Criminal Investigation Over Iran Sanctions (April 25)
HSBC in 2012 agreed to pay the U.S. $1.9 billion and enter into a five-year deferred-prosecution agreement over its failure to catch at least $881 million in drug-trafficking proceeds laundered through its U.S. bank and for concealing transactions with Iran, Libya and Sudan to evade U.S. sanctions.
As part of the deal, the bank was required to hire consulting firm Exiger, which reported to the Justice Department, to monitor the bank’s efforts to improve controls to catch suspicious activity.
It’s not unusual for bank information to be used in government probes. HSBC late last year was released from the deferred-prosecution agreement and was judged to have sufficiently improved its systems to keep out financial criminals.
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