Wednesday, February 18, 2015

Swiss police raid HSBC Geneva office for criminal money laundering following news that HSBC clientele included illegal arms dealers and blood diamond traders. HSBC chief during 1000+ tax evasion cases was promoted to UK Conservative peer and Minister of Trade and Investment-BBC

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2/18/15, "Swiss police raid HSBC's Geneva office," BBC

"Swiss prosecutors are searching offices of the Geneva subsidiary of HSBC bank in an inquiry into alleged money-laundering.

They said they were investigating HSBC Private Bank (Suisse) and "persons unknown for suspected aggravated money laundering". 

The investigation could be extended to people suspected of committing or participating in money laundering....

The raid comes more than a week after allegations first emerged that HSBC's Swiss private bank may have helped wealthy clients evade tax. 

HSBC published a full-page advert in several weekend papers containing an apology over the claims. 

The chief executive of HSBC's Swiss private bank, Franco Morra, said last week it had shut down accounts from clients who "did not meet our high standards".

Mr Morra added the revelations about "historical business practices" were a reminder that the old business model of Swiss private banking was no longer acceptable. 

Criminal investigation 
 
HM Revenue and Customs was given the leaked data in 2010 and has identified 1,100 people who had not paid their taxes. 

Last week, HSBC admitted that it was "accountable for past control failures", but said it had now "fundamentally changed".

"We acknowledge that the compliance culture and standards of due diligence in HSBC's Swiss private bank, as well as the industry in general, were significantly lower than they are today," it added.

The bank faces criminal investigations in the US, France, Belgium and Argentina, but not in the UK, where HSBC is based.

HSBC said it was "co-operating with relevant authorities".

Offshore accounts are not illegal, but many people use them to hide cash from the tax authorities. 

And while tax avoidance is perfectly legal, deliberately hiding money to evade tax is not.

The allegations have caused a political storm in the UK over who knew what and when. 

The leaked data was not received by the government until 2010 by which time the coalition had taken power, but refers to tax evasion that took place under the last Labour government between 2005 and 2007.

The man in charge of HSBC at the time, Stephen Green, was made a Conservative peer and appointed to the government.

Lord Green was made a minister eight months after HMRC had been given the leaked documents from his bank. He served as a minister of trade and investment until 2013.

Shadow chancellor Ed Balls has written to the chancellor accusing him of keeping quiet about the HSBC revelations.

But Treasury sources said George Osborne had given several interviews in the last few days on the matter, and that there was nothing new in Labour's letter."

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"The bank's clients included former and current politicians from Britain, Russia, India and a number of African countries."

2/18/15, "Raid on HSBC's Private Bank in Switzerland," Sky News

"Prosecutors in Switzerland have launched an investigation into allegations of money laundering at HSBC's Swiss private banking arm.

It follows a report that the bank turned a blind eye to illegal activities of arms dealers and traders in blood diamonds while helping rich people evade taxes.

Geneva's prosecutors said that the premises of HSBC Private Bank (Switzerland) in the city were being searched.

A statement said: "Following the recent revelations related to the HSBC Private Bank (Switzerland), the public prosecutor announces the opening of a criminal procedure against the bank ... for aggravated money laundering."

The prosecutors said that although the probe was against the bank itself, the direction it would take may be widened to include individuals "suspected of committing or participating in acts of money laundering".

The announcement came just over a week after HSBC Switzerland found itself at the centre of a global scandal following the publication of secret documents.

The cache of files, made public in a French newspaper, claimed HSBC's Swiss private banking arm helped clients in more than 200 countries evade taxes on accounts containing £77bn ($119bn).

The files, which include the details of 30,000 accounts and the names of celebrities, were originally stolen by former HSBC IT worker Herve Falciani in 2007....

The International Consortium of Investigative Journalists (ICIJ), which analysed the list for the Le Monde newspaper, said accounts were held by arms dealers, dictators' associates, diamond smugglers and other "outlaws".

According to the files, the bank's clients included former and current politicians from Britain, Russia, India and a number of African countries.

Those named in the files include people sanctioned by the US, such as Turkish businessman Selim Alguadis and Gennady Timchenko, an associate of Russian President Vladimir Putin who was the subject of sanctions over the Ukraine crisis.

A statement from HSBC said: "We have co-operated continuously with the Swiss authorities since first becoming aware of the data theft in 2008 and we continue to co-operate."

Last week, the CEO of HSBC's Swiss private bank Franco Morra said it had shut down accounts from clients who "did not meet our high standards" and that the revelations about "historical business practices" were a reminder that the old model of Swiss private banking was no longer acceptable."






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