NEW SFO BOSS INVESTIGATED HSBC AT SAME TIME AS SECURING A MORTGAGE FROM THE SCANDAL-RIDDLED BANK

The new SFO director Lisa Osofsky secured a mortgage from HSBC last year at the same time that she was investigating the scandal-ridden bank for money laundering on behalf of the FBI via a UK-based private business intelligence agency.

Last year Osofsky bought a flat at 73 Iverna Court, Kensington, jointly with her husband Marc Wasserman, an American lawyer. She purchased the property with a mortgage from HSBC for an undisclosed sum, according to Land Registry records

But the choice of HSBC as a lender could lead to allegations of a conflict of interests for the new SFO director who took over the beleaguered agency last month. Firstly, HSBC has been prosecuted and sued on multiple occasions for money laundering, notably of hundreds of millions of drugs money. Secondly, at the time that she accepted the mortgage from HSBC, she was investigating HSBC on behalf of the FBI as head of a private business intelligence agency.

For the past five years Osofsky has been head of investigations and compliance of Exiger Ltd based in London. She led the European side of the firm’s work in monitoring HSBC’s progress in cleaning up its anti-money laundering and sanctions compliance on behalf of the US Justice Department, which fined the bank $1.9billion for breaches in 2012. Exiger regularly gave HSBC a hard time in its reports to the DoJ. Last year, it expressed “significant concerns about the pace of that progress, instances of potential financial crime that the DoJ and HSBC are reviewing further and ongoing systems and control deficiencies”, according to the bank. But at the same time Osofsky was privately negotiating a loan from HSBC.

It is not known if the SFO Director declared her interest to her employers or to the FBI or if she was required to do so. It is likely the FBI have rules about conflict of interests for their contractors and private consultants, but we need to check. A MP who has been critical of the SFO might also comment on our story.

Exiger was actually launched as a company specifically to take on the HSBC monitoring job – started by former US government officials and investigators with a background at Kroll. It has since branched out to work for other clients and become a major player in the compliance and investigations sector. The FBI and DoJ are increasingly outsourcing their investigations to the private sector.

Osofsky began her career as a clerk to US Federal judge James B Moran and over the years prosecuted an estimated 100 cases on behalf of the US Government. She was a Special Attorney in the Fraud Section of the Criminal Division of the DOJ and was stationed at the SFO in London when she was seconded to investigate the collapse of BCCI which was closed in 1991 after revelations of fraud, money laundering and embezzlement. She then served in the DOJ’s Office of International Affairs “where she assisted with extradition and mutual legal assistance matters”.

Osofksyalso served for five years as Deputy General Counsel and Ethics Officer at the FBI when Robert Mueller was FBI director. She wrote the search warrant for the Unabomber and helped to overhaul the agency’s shooting policy after a bloody siege of the home of a white supremacist at Ruby Ridge in Idaho”.

In 2003 she joined Goldman Sachs as a Money Laundering Reporting Officer based in London. In 2006 she became the Executive Director of the private security and investigations firm Control Risks before joining Exiger Ltd and landed the HSBC assignment.

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