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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