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A CACHE OF secret bank files shows that HSBC’s Swiss banking arm helped wealthy customers avoid taxes and hide millions of dollars, according to a report by a network of investigative journalists.
The files, analysed by reporters in the International Consortium of Investigative Journalists (ICIJ), showed that British banking giant HSBC provided accounts to international criminals, corrupt businessmen, politicians and celebrities.
“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,” ICIJ reported.
The files list a range of former and current politicians from Britain, Russia, India and a range of African countries, Saudi, Bahraini, Jordanian and Moroccan royalty, and the late Australian press magnate Kerry Packer.
350 clients with links to Ireland are included in the files, according to the ICIJ website — 51 per cent of whom had an Irish passport or nationality. Most of the data relates to the years 1988 to 2007.
The revelations are likely to stoke calls for a crackdown on sophisticated tax avoidance by the wealthy and by multinational companies, a key political issue in Europe.
Notes in the files indicate HSBC workers were aware of clients’ intentions to keep money hidden from national authorities.
Of one Danish account holder collecting cash bundles of kroner, an employee wrote:
All contacts through one of her 3 daughters living in London. Account holder living in Denmark, i.e. critical as it is a criminal act having an account abroad non declared.
In another memo, an HSBC manager discusses how a London-based financier codenamed “Painter” and his partner could avoid Italian tax.
“The risk for the couple is, of course, that when they return to Italy the UK tax authorities will pass on information on them to the Italian tax authorities. My own view on this was that … there clearly was a risk,” the employee wrote.
HSBC did not immediately respond to a request for comment, but told the ICIJ:
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.
Richard Brooks, a former tax inspector, told the BBC:
I think they were a tax avoidance and tax evasion service. I think that’s what they were offering.
- Businessmen, politicians, designers, models -
The investigation was done by the ICIJ, linked to the US-based Center for Public Integrity, who enlisted more than 140 journalists from 45 countries in cooperation with France’s Le Monde, Britain’s BBC and The Guardian, US programme 60 Minutes, German newspaper Suddeutsche Zeitung and more than 45 other media organisations.
Names in the files include people sanctioned by the United States, including Turkish businessman Selim Alguadis and Gennady Timchenko, an associate of Russian President Vladimir Putin targeted by sanctions over Ukraine.
Alguadis told the ICIJ it was prudent to keep savings off-shore, while a spokesman for Timchenko said he was fully compliant with tax matters.
Former Egyptian trade minister Rachid Mohamed Rachid, who fled Cairo during the 2011 uprising against former president Hosni Mubarak, is listed as having power of attorney over an account worth $31 million, according to the files. He did not respond to requests for comment from the ICIJ.
Other individuals named include the late Frantz Merceron, an associate of former Haitian president Jean Claude “Baby Doc” Duvalier, and Rami Makhlouf, cousin of Syrian President Bashar al-Assad. Makhlouf did not respond to a request for comment from the ICIJ.
- Designer -
Also named were designer Diane von Furstenberg, who told the ICIJ the accounts were inherited from her parents, and model Elle Macpherson, whose lawyers told the ICIJ she was fully in compliance with UK tax law.
Formula One driver Valentino Rossi, listed as having $23.9 million in two accounts, said he had regularised his tax situation with Italian authorities.
Formula One businessman Flavio Briatore is connected to 38 bank accounts that held as much as $73 million between 2006-2007, according to the ICIJ. His lawyer told the ICIJ Briatore’s accounts were legal and complied with tax laws.
The files are a version of a set obtained by former HSBC employee-turned-whistleblower Herve Falciani, who copied thousands of bank documents before fleeing from Switzerland to France, where they were obtained by tax authorities in 2009.
They were used by the French government to track down tax evaders and shared with other states in 2010, leading to a series of prosecutions for tax evasion.
HSBC Private Bank, the Swiss subsidiary of the British banking group, is under formal investigation in a French probe into tax fraud.
In 2012, HSBC paid a record $1.9 billion fine in a settlement in a money laundering case, after a US Senate investigation found it was used to launder hundreds of millions of dollars for Mexican drug cartels.
- © AFP, 2015 with reporting by Daragh Brophy.
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Would love to see the Irish ones named & shamed, dont think there will be any surprises though!
Most likely they have a passport based on their wealth .
Most likely they have a passport based on their wealth .
Well John Magnier seems to be named for one,
Doesn’t seem to be hitting any headlines or named in articles or broadcasts
http://www.icij.org/project/swiss-leaks/explore-swiss-leaks-data
A few minnows are fed to us as drug cartels and the criminal elite write the laws to suit themselves.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=avbx.9LIE6.A
Banks hiding money for dictators and arms dealers?, I nearly fell off my stack of gold bullion
You forgot when HSBC admitting laundering drug money
Sorry should have read to end of the article before posting
Surprise, surprise.
Tip of the iceberg no doubt, while the rest of the country are grinding it out these past years waiting for that light at the end of the tunnel these guys are are squirling away their access financial fat. The money should not just be recovered but the man power gone into it should be funded by hefty fines and then some.
Where is the deafening call from European finance ministers looking for redress for the fraudulent theft of tax monies from their economies.
We the general public get fined or even locked up for not paying tv licence because we have no money, and the rich can avoid tax and get away with it, two standards rich get richer and avoid tax, poor get screwed for everything and can’t avoid it,
According to the I.T there were 20 settlements totaling 4.5 million euro between 2010 and 2014.when was the last time not paying your tv license cost two hundred thousand euro?
great come back dara,, suppose everything is ok now, fair play
A slap on the wrist is all they will get.
Be interesting to see if there is a former Taoseach involved though.
This is on top of HSBC being caught, a year or two ago, helping drug cartels launder their money. The US said their heads couldn’t be prosecuted because the bank was endemic to its economy. This is slightly out if line with its advertising I see on TV.
Banks. Of systemic importance. Cannot be allowed to fail.
Quick, the Irish Government should cover all their debts, someone call for Brian Clown, he will know what to do.
But the Swiss were always known for their ethical and transparent banking system…
This is hardly a surprise. Rich people hiding money in accounts offshore. Named and shamed they should be . but they won’t because how many feathers would get ruffled.
Denis O’Brien is one of the best mates of Fine Gael, despite the fact that he’s a resident of Malta solely to avoid paying tax in Ireland. They don’t just tolerate tax evaders, they openly fraternise with them.
We would all love to be able to afford a team of accountants to find a way to pay less tax. Why should millionaires be any different to you and me. If I could afford to live in a tax haven and pay as little tax as I could I would and so would the vast majority of you. So I don’t get why people bleet on about this person or that person avoiding taxes when given half a chance you would do the exact same yourself.
MJ
An even playing field is the least that should be expected.
What I am saying Phil is people are criticising others for doing something that if given half a chance they would to the exact same.
Denis O Brien a resident of Malta…
Wink wink.
Does not make it right though Mick, thing is there is one law for them and prison for the little man. When the likes of Noonan has actually employed 3 from HSBC who conveniently left the Swiss bank and now working in Government affairs, I think we might be very surprised at what is/has been going on here.
Don’t worry if they are going to be arrested it will be by appointment. But quiet honestly I don’t expect them to be charged with anything.
Having a Swiss or other offshore bank account is not illegal for Irish citizens so long as it is declared by the person to the Revenue Commissioners. According to some reports in yesterdays news a number of individuals who used these accounts availed of tax amnesties to declare the accounts so I would be doubtful if we are going to see anyone brought up for this.
Doubt we will see anyone charged anyway to be honest. Has anyone done time for having an Ansbacher account?
The maximum amount of money associated with ONE client connected to Ireland is $731.5M.
Another file of names to be ” investigated” just like the Ansbacher files.. another inter departmental paper shuffle until they find a suitable corner to lose it in, meanwhile no one can possibly devulge who may be named in it until it is properly ” investigated”
This won’t get much traction today due to the timing of Paul Murphy & Co’s arrests for Jobstown protest…
Timing is everything.
its a big club and you aint in it. https://www.youtube.com/watch?v=k-SuT0L8Ou8 very good coverage of the latest banking crisis.
BANK OF MAFIAS
Ha, Phil Collins name is on it
Stupid list ,only shows one name from Ireland
Phil Collins from Genesis? I’m pretty sure he actually lives in Geneva.
This is likely to be an all day top story on Russia today, probably won’t get a mention on rte…
Since we, as the people footing the bill, are still awaiting information on the holders of Ansbacher accounts and who had loans, or held bonds, with Anglo Irish Bank, I will not be holding my breath for startling revelations. This really is a class issue – worldwide – . The thing that irritates me most is that many of these f***ers who hold millions in offshore accounts are the same yokes pontificating about how little tax plumbers and taxi drivers and workers in general pay. AND they are listened to, and punitive action is undertaken. The word hypocracy is not big enough to cover the actions of the “L’Oreal people”. Time we all woke up BIGTIME.
This is the reason Governments want to control the Internet. That way people cannot access important tax avoidance information about Banksters and their political puppets.
Why is this story not top of the pecking order, bloody blue blooded reptiles. Suppose the blame will be passed on to some dozy civil servant again
The usual, no names will ever be released. Love to see how many revenue staff work on tax fraud versus benefit fraud.
There is loads of people over on those threads commenting about how Paul Murphys arrest was detracting from this, it s bit surprising to see how few of them are here commenting..
Although this is news relating to accounts up to 2007, revenue should and hopefully will ensure the recoup as much as possible from those involved where illegal activity is proven
“Formula One driver Valentino Rossi” – he’s a Motorcycle Racer. Not F1. He tested an F1 car a few times, but never drove competitively.
don’t worry, when the oil runs dry we’ll all become as one. has nobody told them this yet? ah they have but they’re ploughing ahead regardless. bye bye money.
Before you all get over excited about this story remember it was the Swiss arm of HSBC and what is Switzerland famous for if not secretive banking!!
Switzerland is not in the EU and therefore not obliged to follow EU banking regulations. And as for “Tax Avoidance” that is not illegal in any country. It maybe immoral but it is not Tax Evasion which is illegal.
As was explained by a financial expert on the news last night. The Swiss arm of HSBC were compliant with Swiss law in everything they did. But it was out of step with the Parent companies regulations.
The super rich keeping secrets?, Never!
On a related point… HSBCs new private bank in Geneva is quite possibly one of the most beautifully restored buildings I have ever seen.
oh the story is getting the correct billing now
SAVE THE HSBC 350……….Gardai planning huge number of arrests…….not
Sorry but u work like a dog all your life, do well, earn enough to get the bare minimum to be accepted by one of these banks, the real benefit of which is the wealth management side over the tax break, it’s in on impossible to put cash in unless you can prove its legit. and they just give up their clients? Like to see how many people would be crying foul if Aib or Boi released all the private data of the general population. Granted 95% would be negative but you still wouldn’t like it
Name these people! Isn’t that the job for our journalists? If they are above board what’s the problem? Apart from being connected to a bank which props up vicious dictators and arms manufacturers
Whats wrong with having a bank account? absolutely nothing
Nothing, unless its been used to hide tax monies, monies that was earned off the backs of tax payers labour. I can only hope that these revelations will unite Irish tax payers in response to these criminal fraudsters who are stealing their hard earned.
Mr gillhouley are you saying its OK to hide money. Some of which should have been paid to the Irish state in tax. You think this is OK.
Gillhouly is here I see, this clown is a FG troll and uses several different aliases.Looking after his bent buddies as usual!
bit of a tumbleweed non existent story in fairness…
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