Sunday, March 8, 2015

Now I know what happened to HSBC. I remember at one time a lot of my credit card payments had to be sent to HSBC bank to make payments. Those were the days when we all carried a card in our wallet for every store and payments were made by a check sent in an envelope with a stamp on it. One day a brand new building was constructed on a block long property in the center of town and HSBC bank was the sign put on it. I never saw any customers go in or out of the bank. Now the sign says Niagara Bank. I always wondered how HSBC could stay in business without any customers. Then I realized that the bank must have big money accounts and is doing just fine.  

The largest and most damaging Swiss bank heist in history happened where dozens were involved with stolen money and stolen computer files with more than 100,000 names tied into Swiss bank accounts at HSBC which is the second largest commercial bank in the world. A 37 year old computer specialist,   Herve Falciani stole the huge amount of data in 2007 and gave it to the French government. It is now being used to go after tax cheats all over the world. The files show that the bank did business with a collection of international out laws. Tax dodgers, arms dealers and drug smugglers. I always   wondered where these people would hide their assets. It was in HSBC Swiss bank accounts.

It is a rare glimpse for most of us into the world of Swiss banking that has existed throughout this century through wars and just about any upheaval in the world. The stolen data included names, nationalities, account numbers, deposit amounts and most importantly are detailed notes revealing the private dealings between HSBC and its clients. Few people know more about money laundering and tax evasion than Jack Blum who is a lawyer and former United States staff investigator. By reading the notes, you can see that the bank is trying to accommodate the Secretary needs of the client. For example, British citizen Emmanuel Shallop was convicted for selling blood diamonds that are illegal gems used to finance conflicts in Africa. The documents show that in 2005 HSBC knew that Shallop was under investigation yet helped hide his assets. Documents stated “We have opened a company account for him based in Dubai.”

This is not a detective novel full of secrets and wild turns or pirates hiding stolen money on islands. This is recent true life. It makes me proud when corruption is exposed and proud of my name and Frank Serpico who exposed corruption in the NYC Police Department but that is another real life story.  The notes on Shallop bluntly went on to say, “The client is very cautious currently because he is under pressure from Belgian tax authorities who are investigating   activities in the area of diamond tax fraud.”  Instead of exposing a criminal, HSBC worked with the criminals to help them conceal their loot. The bank files contained more than 4,000 crooks with connections to the United States holding more than 13 Billion dollars in HSBC accounts.

For the average American taxpayer this is beyond shocking. Swiss banks have been caught hiding money for people before but never has this much detail been revealed. Under US law, any bank that assists in evading US Tax is guilty of a felony and it doesn’t matter where the bank is located or where the bankers are located. There were real estate people from New Jersey as well an international player Jeffrey Tessler accepting bribe money. This guy Herve revealed all this stuff just to   possibly get money for himself too. He stole the data in 2007and when the Swiss authorities knew he downloaded the information he fled to France. The authorities there have already reclaimed $350 Million dollars just from French tax evading citizens in the data.

An additional hundreds of millions of dollars have been collected from other countries as well now. Since 2010 billions of dollars have been recovered worldwide. The hunt for tax cheats is ongoing. The French newspaper Le Monde got and has been reporting on this story in France. There was so much information that the paper called upon the International Consortium of Investigative Journalists to sort through the information. More than 140 reporters from 45 countries spent more than 7 months digging through it all. In 2012 the US found HSBC bank laundered hundreds of millions of dollars.  They made the bank pay 1.2 billion dollars in a settlement. That represents maybe only a  quarter  months profits. The fine will not seriously hurt the bank at all.  Herve is now a wanted man being charged with industrial espionage by the Swiss. He never profited from exposing the data.

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