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16 Feb

PayPal, American Express implicated in bank fraud

A former employee of one of the world’s largest international banks who has provided WND with more than 1,000 pages of evidence alleges the Internet giant PayPal and American Express are implicated in an international money-laundering scheme involving hundreds of billions of dollars.

The whistle blower, John Cruz, was a relationship manager in the southern New York region for the London-based global bank HSBC.

“I found many accounts where PayPal and American Express were used as conduits through which hundreds of thousands of dollars were deposited or withdrawn from HSBC customer accounts in a pattern of suspicious transactions that should have been reported to legal authorities under various banking statutes, including the Patriot Act,” Cruz told WND.

Neither PayPal nor American Express responded to WND email and telephone requests for comment.

As WND reported, Cruz has a raft of customer account records he claims are evidence of an international money-laundering scheme by HSBC, which reportedly is under investigation by a U.S. Senate committee.

To illustrate his point, WND and Cruz selected the bank checking account for a particular HSBC commercial account, called “Company XYZ” for the sake of this article, for the time period July 21 through Aug. 20, 2009.

Company XYZ was identified in HSBC records with the following information:

It operated out of a private residence in West Hempstead, New York.

The account owner was identified as being 100 percent owned by a person from Malaysia who had non-resident status in the United States and a permanent address in Malaysia.

The president of the company was identified being a U.S. citizen, born in Malaysian.

The account registration was deficient in any meaningful “Know Your Customer” information except to list for the president of the company the numbers of his national identity card, his New York drivers’ license and his U.S. Passport.

The file described the business as: “WELL KEPT HOME OFFICE, COMPUTER, PHONES, FAX, FILES.”

The file noted that the business was last paid a site visit on 12/17/2008 by the HSBC branch manager in E. Northport, Long Island.

The file listed the annual revenue of the company as $1 million.

“When I went to see this business, the address was a two-story house in Wwst Hempstead,” Cruz said. “I knocked on the door, and an Asian gentleman answered the door. In the house there was a wood coffee table in the living room, a red couch and a metal folding chair – nothing else. In the dining room there was a desk, a chair and a phone.”

Cruz said it was difficult to learn anything about the business, because the Asian gentleman did not speak much English.

“My immediate impression was that this was a fake business,” he said.

“I thought there was something really wrong here. For the amount of transactions I saw going through the account, there no evidence of any business taking place here – no packages, no envelopes, no files, no nothing – just an empty desk with nothing on it. There should have been something going on, and all I found was an Asian gentleman who didn’t speak English.”

For the month from July 21 through Aug. 20, 2009, Company XYZ’s revenue was $1,338,151.21, with withdrawals totaling $1,244,632.35, and an ending balance of $261,170.63.

“These figures made no sense to me,” Cruz said, “unless Company XYZ was a shell company set up fraudulently with the only goal of passing money through the account, with the money received from unspecified sources and dispersed from the account to unspecified sources.”