HSBC under fire over massive leak of dodgy Swiss bank accounts

HSBC under fire over massive leak of dodgy Swiss bank accountsIBTimes UK

HSBC's Swiss banking arm helped wealthy clients avoid tax and hide millions of dollars of assets, according to reports citing a massive leak of documents from the bank.

It also advised customers on how to avoid European taxes, colluded with clients to conceal so-called "black" accounts from domestic tax authorities, and opened accounts to international criminals and corrupt businessmen.

The financial leak, reported by the Guardian on Monday, is the biggest in history and has revealed the extent of tax avoidance at the world's second-biggest bank.

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The documents were stolen by Hervé Falciani, a French IT expert, in 2007 after he hacked into customer files and fled to France.

While the French authorities detained him, Falciani was not extradited and the files were used to identify and prosecute French tax avoiders.

HSBC has admitted that some individuals took advantage of bank secrecy but said it has "fundamentally changed".

"We acknowledge and are accountable for past compliance and control failures," the bank said in a statement.

The Swiss subsidiary was never fully integrated into the wider bank, and this allowed it to operate with less checks and balances than other parts of the operation, said HSBC.

The leaked documents revealed the Swiss accounts of more than 100,000 people, including 7,000 British citizens.

BBC's Panorama programme, which was given access to the leaks, said that a French investigation had concluded that 99.8% of names on the list had probably avoided tax.

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The UK's HMRC found that 1,100 Brits had not paid enough tax, although the revelations have only led to one prosecution for tax evasion.

The House of Commons' Public Accounts Committee chair Margaret Hodge condemned the authorities' reaction to the leaked documents.

"I just don't think the tax authorities have been strong enough, assertive enough, brave enough, tough enough in securing for the British taxpayer the monies that are due," she said.

Offshore accounts are not illegal but some people use them to hide money from tax authorities. Deliberately hiding money to evade tax is illegal under UK law.

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