Remember earlier this year when a Senate investigation found that HSBC had effectively turned its head while customers laundered billions of dollars for drug cartels and other illegal entities? Well, it looks like the bank will be hit with a record-setting settlement of $1.9 billion over the mess.

Citing those always dependable “people familiar with the matter,” the Wall Street Journal reports that the government could announce the settlement as early as Tuesday.

The reported $1.3 billion forfeiture would be the highest ever paid by a bank as part of a deferred-prosecution agreement, claim the Journal’s sources. The cherry on top is the $650 million civil penalty.

Unlike many settlements with big banks, which usually result in the bank saying “We’re paying a lot of money but not admitting we did anything,” the Journal says HSBC will fess up to violating the Bank Secrecy Act and the Trading with the Enemy Act.

In 2010, the Office of the Comptroller of the Currency (easily the best name for a government office) flagged HSBC’s “deficiencies with respect to suspicious activity reporting, monitoring of bulk cash purchases and international funds transfers, customer due diligence concerning its foreign affiliates, and risk assessment with respect to politically-exposed persons and their associates.”

HSBC has already issued an apology to the Senate and its employees for failing to “live up to the expectations of our regulators, our customers, our employees, and the general public.”

While the bank has beefed up its controls in order to prevent further mass laundering, recent reports say the feds are also stepping up their own efforts to crack down on laundering at all big banks.

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