Laurent Fievet/Agence France-Presse — Getty Images

LONDON — The British bank HSBC Holdings acknowledged on Monday that its exposure to an industrywide money laundering investigation had swelled as it disclosed that it could face criminal charges in the United States.

With its legal liabilities rising, HSBC set aside an additional $800 million to cover potential fines stemming from the case, bringing its total to $1.5 billion. The bank, which is negotiating a settlement with United States authorities, is expected to pay the largest fine on record for money laundering and related actions.

The trouble at HSBC coincides with a widespread crackdown by federal and state authorities into the illegal movement of money. Officials are moving to choke off the supply of American dollars to drug cartels and terrorist organizations.

Regulators and prosecutors are looking into whether foreign banks failed to monitor cash transactions at their American subsidiaries, allowing drug dealers and terrorists to move tainted money. In addition to scrutinizing money laundering activities, they are also investigating whether institutions skirted rules by transferring money for nations subject to sanctions, like Iran, Sudan and North Korea.

Over the last few years, most of the cases have focused on those so-called sanction violations. The Treasury Department reached a $619 million settlement with ING Group in June over such accusations. A couple of months later, the British bank Standard Chartered agreed to pay $340 million to New York’s top banking regulator, which claimed the bank had laundered hundreds of billions of dollars for Iran for nearly a decade.

Jim Lo Scalzo/European Pressphoto Agency

HSBC faces harsher scrutiny. Besides sanction violations, prosecutors are considering criminal charges related to money laundering, according to several law enforcement officials with knowledge of the matter. It would be the first such case stemming from the broad investigation.

“A lot of banks will likely have to respond if U.S. authorities impose criminal sanctions on HSBC,” said Jimmy Gurulé, an expert on money laundering practices at the University of Notre Dame. “It could send shock waves through the financial services industry.”

This year, HSBC was thrust into the spotlight when the Senate Permanent Subcommittee on Investigations accused the bank of exposing the United States “financial system to money laundering and terrorist financing risks.” The subcommittee claimed that some bank executives had been complicit in the activity, ignoring warning signs and allowing illegal behavior to continue unchecked from 2001 to 2010.

For example, an HSBC executive pushed the firm to continue dealings with Al Rajhi Bank of Saudi Arabia, even though some of the owners of the firm were linked to the financing of terrorism, according to the report. The Senate report found that HSBC’s American operations had provided at least $1 billion in financing to Al Rajhi.

Senate investigators said that HSBC had also failed to effectively monitor the bulk-cash businesses in Mexico even after federal officials warned that drug cartels could harness those operations to move illegal money.

Instead of heightening security precautions in a country rife with drug crime and violence, HSBC officials assigned Mexico the bank’s lowest risk rating for years, according to the Senate report. From 2007 to 2008, HSBC’s Mexican businesses funneled at least $7 billion to the United States, a volume that law enforcement officials warned must have included “drug proceeds.”

At Congressional hearings in July, HSBC executives apologized for any past problems and vowed reforms. David Bagley, who served as head of compliance at the British bank since 2002, announced his resignation at the hearings.

In an effort to fortify its safeguards, the bank has doubled its spending on compliance functions and revamped its oversight. In January, HSBC brought in Stuart A. Levey as chief legal officer. Mr. Levey, a former under secretary at the Treasury Department who focused on terrorism and financial intelligence, has been hashing out new internal standards for thwarting the illegal flow of money. In August, the bank hired Robert Werner, who formerly oversaw the group at the Treasury Department that enforces sanctions.

“We deeply regret what took place” in the United States and Mexico, HSBC’s chief executive, Stuart T. Gulliver, told reporters in a conference call on Monday. “A number of people have left the bank and have had clawbacks against their compensation.”

The bank’s legal woes have weighed on its earnings.

On Monday, the bank announced that net profit had dropped by nearly 50 percent in the three months that ended Sept. 30, to $2.8 billion, compared with $5.5 billion the previous year. Along with the additional legal provisions, HSBC added that it incurred a quarterly charge of $1.7 billion on the value of its own debt during the quarter.

Shares in HSBC fell 1.3 percent in London on Monday.

Excluding the adjustments, the bank said pretax profit in the third quarter more than doubled, to $5 billion, slightly below analysts’ estimates. Despite the weak global economy, HSBC’s pretax profit in its global banking and markets division, which includes its investment banking operations, more than doubled to $2.2 billion. Pretax profit at its commercial banking unit increased 16 percent, to $2.2 billion.

HSBC is benefiting in part from fast-growing markets like Asia and Latin America. While the bank reported a pretax loss in its European and North American operations, it posted a $1.8 billion pretax profit in its Hong Kong business, an increase of almost 40 percent from the third quarter of 2011.

Still, the legal problems could crimp profits for a while.

On Monday, the bank indicated that a resolution of the money laundering investigation would probably include corporate criminal and civil charges, as well as large fines. In the end, the bank, which has already set aside $1.5 billion to cover the potential fines, said its total costs could be even higher.

Mark Scott reported from London, and Jessica Silver-Greenberg from New York.