Last year was a record year in corporate settlements, and for those harboring any faith in our criminal justice system, it was also a record year in disillusionment.

In 2012, the Department of Justice broke its all-time record for corporate settlements, raking in $9 billion. (The previous high was at six billion in 2006.) This might sound like good news for the US Treasury, but the real winners were the corporate executives who escaped criminal prosecution. The biggest winners were HSBC, which settled for $1.9 billion after a money-laundering debacle, and GlaxoSmithKline, which settled for a staggering $3 billion for drug misbranding.

With the recent settlement between Halliburton and Department of Justice over destroying evidence connected to the Deepwater Horizon Oil Spill, we’ve provided this handy list of the most egregious cases of paying for crimes that would have sent the average Joe to prison for 20,000 years.

Halliburton and the Deepwater Horizon Oil Spill
Just a few days ago, news broke that Halliburton agreed to plead guilty to destroying evidence in the 2010 Deepwater Horizon Oil Spill – getting off with a $200,000 fine.

That is a pitiful sum for such a huge corporation, though the company also gave a “voluntary” 55 million dollar donation to the National Fish and Wildlife Foundation at the same time.

Some experts also think that the guilty plea and voluntary donation suggest the company will try to enter into a similar settlement over the civil charges, which would surprise precisely no one.

National Mortgage Settlement

After banks were caught red-handed committing systematic mortgage fraud on a vast scale, a collection of state and federal officials brought the first substantive punitive action against five of the nation’s biggest largest loan servicers with a $25 billion mortgage fraud settlement.

The settlement penalized the banks for “robo-signing”, or forging signatures or signing documents without verifying information and for using fraudulent documents to foreclose on homeowners.

Aside from the 25 billion dollars – the sum of what was paid to states and foreclosure victims – the most meaningful impact of the settlement was in its introduction of a sweepign array of new service standards that would ostensibly protect borrowers from the same abusive practices in the future. The settlement is all the more infuriating, then, because some reports, like one conducted by NBC Bay Area and the Center for Investigative Reporting, have found that abuse still runs rampant in the industry.

Indeed, the settlement’s enforcement structure, which gives oversight responsibilities to the banks themselves, all but ensures that the settlement will suffer from huge gaps in meaningful enforcement.


In July of last year, GlaxoSmithKline pled guilty to charges brought about by a few employees who came to the government about improper marketing practices. Among the employees’ allegations were that the company had marketed the antidepressant Paxil to children and had marketed Wellbutrin for conditions like weight loss and sexual dysfunction, despite it being approved only for depression.

The company agreed to pay $3 billion in fines.

According to the employees, the company also failed to disclose studies to the FDA that detailed the cardiovascular risks of Avandia between 2001 and 2007. Since 2007, the drug has changed its labeling to inform patients that the drug increases risks of heart attacks and congestive heart failure – something that probably would have been useful for the diabetic patients taking the drug in the six years before the label.

In what seems like an attempt to make the sellers look like rogue offenders, and to offset the signs like labeling failures that suggest it was a top-down operation, the company issued a statement that it changed a number of its policies, including the one that rewarded sales reps for the highest number of prescription drugs sold.

Andrew Witty, the company’s chief executive, assured the public that the company felt “regret” and had “learned from the mistakes that were made”.



Earlier this month – after some naively hopeful spectators wondered whether the deal would close – a federal judge approved HSBC’s $1.9 billion agreement with the U.S. to resolve charges that it enabled South American drug cartels in launder billions of dollars.

In what the Department of Justice called “stunning failures of oversight”, the bank failed to monitor huge amounts of cash flows through HSBC banks that were ultimately traced to drug cartels. Something like $670 billion dollars in wire transfers and more than $9.4 billion in purchases of U.S. currency from HSBC Mexico would, it seems, jump out to any bank with even an unsophisticated anti-laundering program. But somehow, the largest bank in Europe overlooked it.

HSBC also acknowledged conducting transactions for customers in Burma, Cuba, Libya, Iran and Sudan – all under U.S. sanctions.

Of course, as we learned after the 2008 bailout, one of the more interesting things to watch will be whether HSBC manages to maintain its executive bonuses. The settlement requires the bank to tie these bonuses to their performance on meeting certain compliance standards.

According to HSBC Group Chief Executive Stuart Gulliver, the bank is “profoundly sorry.”

Katelyn Fossett

Katelyn Fossett is an intern at the Washington Monthly. Find her on Twitter: @katelynfossett