A cache of secret files allegedly reveals that global banking giant HSBC helped tax dodgers stay ahead of the law, conceal millions of dollars worth of assets and dole out bundles of untraceable cash. The secret files were obtained through an international collaboration of news outlets, including the Washington-based International Consortium of Investigative Journalists, The Guardian, and the BBC’s Panorama. The organizations claim the files reveal that HSBC’s private Swiss bank aggressively marketed schemes likely to enable wealthy clients avoid European taxes.
HSBC holds $7.6 trillion in overseas tax havens
The leaked files relate to accounts holding over $100 billion. The documents allegedly reveal that the bank’s dealings with clients followed a spectrum of illegal behavior, especially in hiding hundreds of millions of dollars from tax authorities. These disclosures seem to throw light on the intersection of international crime and legitimate business, and they dramatically expand what’s known about potentially illegal or unethical behavior in recent years at HSBC, Britain’s biggest bank.
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The news organizations that obtained the documents say they indicate that some clients were making trips to Geneva to withdraw large wads of cash, sometimes in used notes. The leaked files also reportedly highlight huge sums of money controlled by dealers in diamonds who are known to have operated in war zones and have allegedly sold gemstones to finance insurgencies that caused untold deaths. The documents also allegedly show private records of famed soccer and tennis players, cyclists, rock stars, Hollywood actors, royalty, politicians, corporate executives and old-wealth families.
In several instances, the records reportedly highlight questionable behaviors such as bankers advising clients about how to take a range of measures to avoid paying taxes in their home countries and customers telling bankers that their accounts are not declared to their governments. According to the ICIJ report, academics conservatively estimate that $7.6 trillion is held in overseas tax havens, costing government treasuries at least $200 billion a year.
The secret files obtained by ICIJ reportedly encompass information on accounts through 2007 that are associated with over 100,000 individuals and legal entities from over 200 nations. They are reported to be a version of the ones the French government obtained and shared with other governments in 2010, leading to prosecutions or settlements with individuals for tax evasion in several countries.
In 2012, HSBC agreed to pay over $1.9 billion to settle U.S. criminal and civil investigations and entered into a five-year deferred prosecution agreement.
ICIJ also revealed the source of data that shook HSBC.
Accused of collusion with clients
According to The Guardian, the HSBC files covering 2005-2007 amount to the biggest banking leak in history, shedding light on some 30,000 accounts holding almost $120 billion (£78 billion) in assets. HSBC was named in the US as a co-conspirator for handing over “bricks” of $100,000 at a time to American surgeon Andrew Silva in Geneva so that he could illegally post cash back to the US.
The BBC’s Panorama reports that the thousands of pages of documents include details of almost 7,000 British clients and that many of the accounts were not declared to tax authorities. HM Revenue and Customs (HMRC) was given the leaked data in 2010 and has identified 1,100 people who had not paid their taxes. But almost five years later, only one tax evader has been prosecuted.
We covered a 60-minute video on the HSBC “Swiss Leaks.”