Breuer defended the government's agreement with HSBC. He said that U.S. employees in particular seemed duped by criminal enterprises taking advantage of HSBC oversight policies that over decades became increasingly lax.
Court documents showed that the bank let over $200 trillion between 2006 and 2009 slip through relatively unmonitored, including more than $670 billion in wire transfers from HSBC Mexico, making it a favorite of drug cartels and money launderers. HSBC Bank USA at the time rated Mexico in its lowest risk category.
Top executives who felt "the pressure of the bottom line" continually cut staff who might have discovered how criminal enterprises were taking advantage of the bank, Breuer said.
Officials noted that the deal for the first time resulted in U.S. court supervision of a foreign banking institution and lengthy monitoring of a radically changed bank that had changed all its top management.
Before the government stepped in, HSBC used only one or two compliance officers to monitor its banknotes business - the wholesale buying and selling of bulk cash around the world - even though the business is highly vulnerable to money launderers.
Despite the high risk, discrepancies and suspicious activity in banknotes transactions were not reported from July 2006 to July 2009, when the banks' compliance staffing was at its worst.
In March 2008, when 13,000 to 15,000 suspicious wire alerts were generated per month by such transactions, only four employees were around to review them, according to court papers. HSBC Bank USA now has 430 employees reviewing suspicious wire alerts.
"I think it's a disservice to suggest that anyone's getting a pass here," Breuer said.
Asked repeatedly why no bank executives were being prosecuted, Breuer said, "I'm not here to defend HSBC." Yet, he added: "Our goal is not to bring HSBC down."
He said to do so would affect the economy and cost thousands of people their jobs. He said no criminal charges would be brought unless it could be proved that executives purposely tried to let criminal organizations launder money.
Other officials noted that some of what was going on may have violated U.S. laws but not the laws of Britain or other nations where HSBC employees were carrying out their work.
The bank's CEO, Stuart Gulliver, said that it accepted responsibility for its mistakes and was "profoundly sorry." He added: "The HSBC of today is a fundamentally different organization from the one that made those mistakes."