By Brett Wolf
St. Louis, Feb 26 (Reuters) - HSBC Holdings has named aformer agent of the Department of Homeland Security and experton high-risk clients to head a U.S. anti-money launderingoperation being revamped after the bank paid a record fine overcompliance lapses.
Daniel Wager, who helped investigate HSBC for the federalagency, joined the HSBC's anti-money laundering team lastNovember as a senior vice-president. He assumed his new postthis week, a spokesman for the bank told Compliance Complete.
Wager has gained prominence as an authority on antimoney-laundering (AML) issues. Before joining HSBC he headed TDBank Group's global enhanced due diligence unit, overseeing thehandling of high-risk clients. In his new role at HSBC's U.S.unit, Wager is to oversee AML compliance across all businesslines.
Prior to entering the private sector in August 2011, Wagerwas a supervisory special agent with Homeland Security'sinvestigations arm and led a New York-based, multi-agencyfinancial intelligence unit.
Among other things, Wager played a role in probing AMLlapses at HSBC, sources familiar with his background said.
In December 2012, the bank paid to U.S. authorities what wasthen a record fine of $1.9 billion to resolve charges that itfailed to stop hundreds of millions of dollars in drug moneyfrom flowing through the bank from Mexico, and promised at thetime to fix AML lapses.
The U.S. government has led a crackdown on financialinstitutions that fail to adequately guard against impropertransactions.
Despite a number of high-profile hires, HSBC has struggledto convince U.S. regulators that the AML controls surroundingcorrespondent banking, one of its riskiest and most profitablelines of business, are in order.
Two top legal officials at HSBC's U.S. arm, anti-moneylaundering director Alan Schienberg and chief compliance officerGary Peterson, left in November amid HSBC's compliance overhaul.
HSBC recently hired former JPMorgan executive Jessica Gomelin a new position, global head of financial crime compliance forcorrespondent banking, to try to bolster its ability to policecurrency clearing and other activity. Wager is positioned tosupport that effort, the sources said.
As part of a restructuring that relies on regional heads of"financial crimes compliance" to police transactions, HSBC lastmonth hired former Bank of America executive Patty O'Connor tobe its U.S. regional head.
Wager will report to O'Connor as well as Peter Hazlewood,HSBC's London-based global head of AML. (This article was produced by the Compliance Complete serviceof Thomson Reuters Accelus (). Compliance Complete provides regulatory news, analysis, rulesand developments, with global coverage of more than 400regulators and exchanges.)