Swiss prosecutors raid HSBC offices in money laundering probe
Wednesday, February 18, 2015 at 9:28AM
Richard L. Cassin in Belgium, France, HSBC Holdings Plc, Herve Falciani, International Consortium of Investigative Journalists, Switzerland, Tax Evasion, money laundering, sanctions violations, trade sanctions

Prosecutors in Switzerland searched the offices of HSBC's private bank in Geneva Wednesday as part of an investigation into money laundering.

The Geneva prosecutor’s office said it opened a criminal inquiry into possible money laundering against HSBC Private Bank (Suisse).

The International Consortium of Investigative Journalists said in a report this month that employees at the bank promised customers that their account information wouldn't be released to tax authorities in their home countries.

The Washington, D.C.-based ICIJ based its report on internal HSBC documents leaked by a whistleblower.

The whistleblower, Hervé Falciani, was an HSBC employee in Switzerland in 2007. He first leaked the documents to French authorities. His disclosures included the names of 130,000 account holders allegedly evading taxes in several countries. In 2010, French prosecutors shared the documents with officials in the UK and the United States, among others.

The parent HSBC Holdings plc is headquartered in London. The bank said Wednesday it is cooperating with Swiss authorities.

HSBC published an open letter Sunday in UK newspapers from CEO Stuart Gulliver. He apologized and said the bank won't do business "with clients who are evading their taxes or who fail to meet our financial crime compliance standards." A copy of the open letter is here (in pdf).

In 2012, the bank paid $1.92 billion in fines to U.S. authorities for money laundering involving the Mexico drug trade. A U.S. Senate invesgation found massive compliance failures at the bank involving alleged money laundering, trade sanction violations, and terrorism financing.

Outside Switzerland, HSBC is still under investigation for tax offenses in France, Belgium, and Argentina.

The whistleblower, Falciani, has been charged in Switzerland with violating bank secrecy laws. He's a fugitive living in France.

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Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here

Article originally appeared on The FCPA Blog (http://www.fcpablog.com/).
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