International banking giant HSBC came under fire today as it emerged the private Swiss arm of the company allowed thousands of customers to engage in tax evasion schemes and money laundering linked to terrorism and arms trafficking in the biggest banking leak in history.
The enormous cache of account data was initially leaked to the French government in late 2007 by Franco-Italian whistleblower Hervé Falciani, a former IT employee at the bank. In 2014 the papers were obtained by French newspaper Le Monde, who launched an investigation in collaboration with the International Consortium of Investigative Journalists (ICIJ) and more than 50 other media outlets around the world.
The documents expose the details of around 7,500 Italian, 7,000 British, 6,000 French, 4,600 Belgian, 300 Danish and 80 Finish clients who held accounts within the branch, many of which were undeclared to the taxman. The 30,000 accounts in question hold almost $120 billion in assets.
Among the celebrities who held accounts with the private Swiss branch are singers David Bowie, Phil Collins and Tina Turner, supermodel Elle MacPherson and sport stars Fernando Alonso, Michael Schumacher and Diego Forlan. King Mohamed VI of Morocco and King Abdullah II of Jordan also held accounts, though none of the above have been accused of any offenses.
According to the ICIJ's 'Swiss Leaks' findings, until 2006 the banking giant managed accounts containing tens of millions of dollars for Saudi Arabian businessmen suspected of donating money to Osama Bin Laden in 2001 and even opened accounts for a U.S. crystal meth gang and a convicted drug dealer.
The ICIJ said: "HSBC profited from doing business with arms dealers who channelled mortar bombs to child soldiers in Africa, bag men for third world dictators, traffickers in blood diamonds and other international outlaws."
While off-shore accounts are not illegal, deliberately hiding money from the authorities is considered a criminal offence in most countries. By contrast, Switzerland treats tax evasion as a law infringement punishable by a fine or additional taxation deemed appropriate by tax authorities.
Belgian publication Le Soir revealed that such accounts deprived the country's economy of around €6 billion in revenue, while wealthy Danes concealed more than 4.8 billion kroner ($730 million) according to The Local Denmark.
In November 2014 France placed HSBC under formal investigation, and accused the bank of "money laundering the proceeds of tax evasion", The Local France reported. French authorities currently have around 60 cases open against people on Falciani's list. According to investigators, just 0.2% of French offshore account holders declared they had them.
As well as France, Belgium, Argentina and the U.S. have all launched criminal investigations into the bank's practices, however the UK is yet to take legal action.
The bank has acknowledged it is accountable for past compliance and control failures and said it is "co-operating with relevant authorities".
Belgium may issue an international arrest warrant for some of the bank's directors on the grounds that they are not co-operating in a money-laundering investigation.
The leader of Spanish left-wing party Podemos, Pablo Iglesias, met with Falciani today and appointed him to draft a report - a "kind of political programme" - detailing measures to combat fraud and tax evasion using government legislation and regulation, according to online Spanish newspaper El Diario.
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