## Facts

- The United States charged HSBC Bank USA, N.A. by information with Bank Secrecy Act violations, including willfully failing to maintain an effective anti–money laundering (AML) program.
- The United States charged HSBC Holdings plc with willfully facilitating transactions for sanctioned entities in violation of IEEPA and TWEA.
- The parties submitted a deferred prosecution agreement (DPA), a statement of facts, and a corporate compliance monitor agreement.
- The DPA contemplated a five-year deferral period, after which the government would seek dismissal of the information if HSBC complied with the DPA’s terms.
- The government and HSBC jointly asked the court to hold the case in abeyance and exclude the five-year period under 18 U.S.C. § 3161(h)(2).
- HSBC agreed to extensive remedial measures, including major AML compliance reforms, substantial compliance resourcing, and oversight by an independent monitor, along with significant monetary penalties.
- At a status conference, the court raised whether it could accept or reject the DPA and whether the agreement adequately reflected the seriousness of the charged conduct.
- The parties argued that Rule 11 and U.S.S.G. § 6B1.2 did not govern DPAs because those provisions address plea agreements.

## Issues

1. Whether a district court may substantively review and approve (or reject) a corporate DPA when asked to exclude time under 18 U.S.C. § 3161(h)(2).
2. Whether the court may condition a § 3161(h)(2) exclusion on ongoing judicial supervision of DPA implementation, including periodic compliance reporting.

## Decision

- The court approved the DPA and granted the requested Speedy Trial Act exclusion under 18 U.S.C. § 3161(h)(2), placing the prosecution in abeyance for five years.
- The court concluded that § 3161(h)(2)’s “approval of the court” language required more than a ministerial act and permitted substantive review to ensure the deferral was not a pretext to evade the Speedy Trial Act.
- The court determined that Rule 11 and U.S.S.G. § 6B1.2 did not squarely control DPAs, but it could proceed based on § 3161(h)(2) and the court’s supervisory authority over the administration of criminal justice.
- After reviewing the seriousness of the misconduct described in the statement of facts and the DPA’s penalties, reforms, and monitor provisions, the court found the agreement fell within a reasonable range of outcomes and approved it.
- The court ordered ongoing reporting, directing the government to submit quarterly updates regarding HSBC’s compliance while the case remained pending.

## Legal Principles

- When the parties seek a Speedy Trial Act exclusion for a deferral agreement under 18 U.S.C. § 3161(h)(2), the court has a statutory role to decide whether to approve the exclusion.
- The court may conduct substantive review sufficient to confirm that a DPA-backed deferral is consistent with the fair administration of criminal justice and is not used to circumvent Speedy Trial Act requirements.
- A district court may invoke supervisory authority in managing a pending criminal case, including measures aimed at ensuring that court-approved deferral arrangements operate as represented during the excluded period.
- Although plea-agreement standards in Rule 11 and U.S.S.G. § 6B1.2 may inform evaluation, they do not necessarily apply directly to DPAs.

## Conclusion

The court approved the government–HSBC DPA and excluded five years under the Speedy Trial Act, reasoning that § 3161(h)(2) required judicial approval with substantive review and permitting the court to require periodic compliance reports while the prosecution remained deferred.


United States v. HSBC Bank USA, N.A., No. 12-CR-763 (E.D.N.Y. 2013)