Seems global number two bank HSBC has been very naughty over the years, going out of its way to providing services in “creative tax avoidance” for those who could afford it.
The private-banking unit of HSBC Holdings Plc made significant profits for years handling secret accounts whose holders included drug cartels, arms dealers, tax evaders and fugitive diamond merchants, according to a report released Sunday by an international news organization.
HSBC is among a handful of banks to face criminal prosecution in recent years for its role in a Swiss banking system that allowed depositors to conceal their identities, and in many cases dodge taxes or launder ill-gotten cash. The report, prepared by the Washington-based International Consortium of Investigative Journalists, revealed for the first time the massive sweep of HSBC’s private-banking arm as of 2007, when it controlled $100 billion in assets and served a swath of wealthy depositors from the elite to the illicit.
A whole hell of a lot of tax money got dodged thanks to these guys, and it may be time to pay the piper very soon.
The report is based on a list of HSBC clients from around that time that a onetime employee took from the bank and turned over to European officials, sparking tax investigations from Argentina to France, Belgium and Greece. While some of the list’s names have emerged before, Sunday’s report drew from a more comprehensive list of accounts associated with more than 100,000 people and legal entities from more than 200 nations, ranging from the legitimate to the illicit.
“These revelations confirm that banking secrecy has been used to avoid taxation,” Vanessa Mock, a European Union spokeswoman for tax affairs, said Monday.
Depositors included royal families and convicted cocaine dealers, ambassadors and terror suspects, entertainers and elected officials, corporate executives and athletes. To these and other clients, the bank actively promoted its accounts as an efficient way to hide assets from tax collectors, according to the report.
Bet long on tumbrels, guillotines, and various flavored popcorn. Suddenly these tax loopholes are looking like very tasty sources of government income, at least in Europe.
In America, well, not so much, I’d think. We’ll see.
Alex S.
Switzerland is really feeling the pressure at the moment. About time, I’d say.
Chris
Well. Our conservative betters, the people so concerned about dangerous terrorists and criminals and sympathizers getting away with things because of limp-dicked bureaucrats alleging that “people” have “rights,” have been saying for years that the only proper response to people like this is to lock them up in Guantanamo and torture the bejeezus out of them. Ticking time bomb scenarios, doncha know.
So, I have complete confidence that we’ll soon be hearing a storm of conservatives insisting that these bankers who’ve been providing a vital service to terrorists for years be given that exact treatment.
…
…
… ::crickets::
You’re not telling me they’re… selective about their legal opinions, are you? I mean, that would be Moral Relativism. Which would be very, very wrong. Worse, it would be liberal.
bartkid
NAMES! Don’t just point to the reporting. Publish the list of names.
Lee
@bartkid:
You peruse the data at your leisure here
c u n d gulag
I’ll be shocked if some Bankster goes to prison.
At least in America.
Maybe there’s more hope for that in Europe.
c u n d gulag
I’ll be shocked if some Bankster goes to prison.
At least in America.
Maybe there’s more hope for that in Europe.
burnspbesq
A fair number of HSBC clients have been identified by IRS and DOJ. Some have paid up and paid major civil penalties. Some are fighting. At least some of those who fight and lose will do time. A large number of cases are still being processed through the IRS’ Offshore Voluntary Disclosure Program.
The IRS’ policy goal is to bring non-compliant taxpayers into compliance going forward, not to extract every dollar that can be extracted. You can like that or not, but it is what it is.
Cervantes
That HSBC is making money in this way should come as no surprise. It has been doing so from the very beginning. The bank was created to finance the opium trade in China and to help repatriate to London the full range of ill-gotten gains in the colonial Far East.
Recent attempts to scrub that history may be working. In a conversation a few weeks ago with a senior banking executive, I deliberately referred to HSBC by its original name — the Hongkong and Shanghai Banking Corporation — and was amused to see that even he did not recognize it as his own current-day partner in crime.
Mike in NC
So Mitt will need to place a few phone calls to get his Swiss accounts transferred to the Cayman Islands?
boatboy_srq
@Chris: Add to that the list includes “convicted cocaine dealers,…, entertainers and… athletes”, who by Conservatist standards are hopeless unGodly lieberals. So pushing for quick and final resolution to this mess should be a no-brainer. Oh, wait…
trollhattan
Here’s how the Chinese do it.
Guessing his ultimate crime was not paying off the right officials.
BGinCHI
Capitalism without conspiracy = Socialism
Litlebritdifrnt
@Cervantes:
Home of the ugliest building in Hong Kong, or at least when I was there in 88. I had an account there, only for convenience though. My paycheck went into my Nat West account in Britain which I could access through the Nat West ATM IN HONG KONG IN 1988! When I first moved to the US in 1991 I was absolutely stunned to discover that we would have to carry cash out of State with us because the ATMs in NC didn’t want to talk to the ATMs in Missouri. I honestly thought I’d moved to a third world country.
Bobby B.
Why didn’t “60 Minutes” ask Sheldon Adelson a few questions? Didn’t want to piss off one of the Masters.
Mandalay
Here are some interesting numbers from Britain:
So over there the wealth creators are cheating the country at more than three times the level of the young bucks and welfare queens.
BGinCHI
@Bobby B.: 60 Minutes make NPR look like the Red Brigade.
Mandalay
@Zandar:
I fear you are being way too optimistic. In Britain:
You get caught cheating your country out of paying your taxes. When you face the music anonymity is extended as a professional courtesy, and prosecution is close to unthinkable.
Scamp Dog
@Litlebritdifrnt: have you observed anything in the last twenty-some years to change your mind about that?
catclub
Why? I have certainly noticed even fewer European countries fining banks than the US doing it.
Maybe I missed a lot.
catclub
@Bobby B.: I bet they did not ask if his gaming establishments were siphoning Chinese Commie money into US politics.
burnspbesq
@Mandalay:
Virtually every country in the world has a statute similar to Internal Revenue Code Section 6103, which with limited exceptions treats “returns” and “return information” as confidential and not subject to disclosure by the government.
Would you really like Cole to be able to submit a FOIA request for your tax returns and post them here?
jl
@Cervantes: Thanks for the reminder that HSBC Switzerland is a subsidiary of a UK banking conglomerate. And have not several too big to fail US banks been caught doing similar money laundering (but maybe less specifically on US citizen tax evasion since easier to get nailed on that)?
That is a good thing, since even if no banksters go to jail anywhere, HSBC has enough subsidiaries in different countries to make getting some money out them will be easier.
HSBC
http://en.wikipedia.org/wiki/HSBC
Disclosure: half of me is of Swiss heritage. But, I am willing to acknowledge that in some sense the Switzerland’s banking industry has been a way to make some money after the fashion of the Swiss mercenaries after that latter industry died out. Due to being too ugly for the Swiss themselves, and eventually getting its butt kicked.
Edit: but at any rate, it made sense for HSBC to funnel its money laundering and tax evasion business line to the Swiss subsidiary because the ugly aspects of Swiss banking made it attractive.
Major Major Major Major
Shocked, gambling, etc.
sparrow
@burnspbesq: I don’t see why not.
Litlebritdifrnt
@Scamp Dog: Certainly not in the banking system, it is still archaic. I stopped using checks (cheques) to pay my bills 30 years ago. It is funny but several years ago I met a woman in Chadbourn, NC who had been a GI Bride. She had lived in Manchester (very industrialized) during the war and moved here shortly after the war ended. At that time her husband was from a farm in Chadbourn which had no electricity and no running water. I asked her what she thought about that and she said that she thought she had moved to Africa or something and her parents were absolutely furious that she was having to live that way. I often wonder where a lot of the GI Brides thought they were going to end up when they moved here.
Major Major Major Major
@sparrow: because a huge chunk of the law is tied up with the idea of financial non-disclosure? To facilitate capitalism and democracy?
ETA: not being sarcastic. This is all Enlightenment stuff.
jl
@burnspbesq:
” Would you really like Cole to be able to submit a FOIA request for your tax returns and post them here? ”
Mine are so boring and simple that it would be OK with me. Could we FOIA his? For how long back? I’m still curious about Tunch’s food money. How did Cole ever pay for that?
Jane2
They’ll get (another) big fine, and promise to never, ever do it again. Or at least until they’re caught again.
Cacti
My suspicion about candidate Romney’s tax returns in the 2012 eclection was that he wouldn’t release them because he took the 2009 Swiss tax cheat amnesty.
Berial
@Chris: The sad part is at it’s very beginning, there was a chance that the ‘Tea Party’ types WOULD turn against the banksters, whom many blamed for the ‘great recession’, but their ‘Betters’ saw that and decided to throw money at it and twist the ‘grass-roots’ into astroturf and that anger was turned towards ‘blacks, browns and the poors’. The sad part is how easily the TPers let that message get turned.
Tree With Water
Is anyone surprised? I’d have been surprised if it was any different. And I’ve seen enough James Bond movies to know what I’m talking about.
catclub
@Litlebritdifrnt: Of course, that non-interstate ATM issue was deeply related to Glass-Steagal, and its prohibitions on interstate banking. The fact that slow development also means fewer or no bubbles and collapses is a side benefit that is not always appreciated.
(1988-9 banking collapse was savings and loans – not banks.)
catclub
@Cacti: You and 20 million other left leaning voters.
And yet we did not collectively make enough of a stink about it to make it an issue. Also 2003 anti-war protests.
Couldn't Stand the Weather
LULz.
Steve may give most cats a run for their non-HSBC money, as far as food costs are concerned. Dude has significant mass.
On the topic at hand…. Dirty, lying, cheating banksters! Huh. Color me surprised.
It’s not like the banking/finance industry would ever crash the world economy via a real estate bubble and other fucked up practices, and through self-dealing and hip-deep bullshit actually get away with it.
Do I sound bitter to you?
catclub
@Couldn’t Stand the Weather: Speaking of bitter and boiling mad:
http://www.prospect.org/article/needless-default
Chris
@Tree With Water:
Apparently the only thing Casino Royale got wrong was to make Le Chiffre a fugitive and underworld figure. As opposed to a multinational banking cartel with public offices all over the world.
Another Holocene Human
****Hey Amir Khalid, hope you’re listening****
My union just emailed me this sort of hysterical call to action over TPP fast track approval. I get that there are these issues with environmental and labor laws with trade agreements (although the US has been the aggressor on a lot of this stuff). What stopped me in my tracks was that the letter calls out “Brunei, Malaysia, and Vietnam” as “serial human rights abusers”. (I wouldn’t have blinked at Burma, Indonesia and IDK Sri Lanka as a dirty three, just so you know.)
Thoughts?
PS: ex-Confederate states just killed some mentally disabled men in the last few weeks and we incarcerate like the authoritarian regime we are so … eh. Eh.
eta: Sorry it’s not a sport question, Amir. I know that’s one of your fav topics OTOH you do like to dish on Malaysian politics, I think. Hope?
Corner Stone
@catclub:
It’s not going to hurt Democrats because no one can understand what DDay is writing there, “long form”.
It should hurt some politicians but it won’t. Speaking of bitter, that is.
Major Major Major Major
@Another Holocene Human: The in-laws are Vietnamese refugees who had to leave some family behind, and from what I’ve heard, yeah, Vietnam is pretty bad still. The family was on the losing side, of course, so consider the source…
(father in law was in a prison camp for years and then they had to spend two years floating around the South China Sea with an infant, getting robbed by pirates, before they finally made it to the Philippines)
Eric U.
@Corner Stone: Duncan Black has been harping on that for years. His main point is that the administration had the authority to stimulate the economy and wasted it. The fact of the matter is that most people are uninterested in the plight of people that bought too much house for their income. Of course, that’s an unfair characterization in many cases, but that’s how people see it.
Corner Stone
@Eric U.:
Boo! Hiss!! Atrios bad!!
Anyway, yes, this is one case where there is no equivocation. The WH and admin had all the control. And they didn’t waste it. They used it exactly as they chose. Let’s not let them off so easily, please.
There was agency there, and the outcomes…
Arclite
“Put your wrist out.”
*smack!*
“Now be good from now on!”
Mandalay
@burnspbesq:
The fact that you have evaded taxes is completely distinct from your personal tax details, and it’s a policy choice of the British government to grant tax evaders anonymity – it’s nothing to do with the rule you cite.
In fact, in the past the British Government had even published of a “wanted list” of tax fugitives. So much for your Section 6103.
JGabriel
I’m shocked, shocked, that banking secrecy has been used to avoid taxation.
Seriously though, what possible purpose is there for Swiss-style banking secrecy other than avoiding taxation? I can’t think of any.
Villago Delenda Est
@trollhattan:
You’re probably right on the money (so to speak) with that guess.
Failure to allow Communist (ha!) Party officials to wet their beaks in your swag pool is most certainly a capital offense. Just ask Don Fanucci about that.
Villago Delenda Est
@Eric U.: Those people held a gun to the home loan officers head and FORCED the loan officer to loan them that money.
Hey, it’s what thugs do, right?
raven
I just went through the jury selection process on an armed robbery with two defendants and 19 charges. They asked each juror if they had ever been in a physical altercation. I was the ONLY one. 48 people and I’m the only one that’s been in a fight! Then the dude says “can you tell us about that”?
Villago Delenda Est
@Another Holocene Human: Brunei and Malaysia are majority Muslim, so there you go. They probably make it difficult for Christian televangelists to operate there, so they’re oppressing human rights.
Major Major Major Major
@raven: Seriously? Weird. Seriously weird.
Tommy
This sounds like an asshole thing to say and I don’t mean it that way. My parents have more money than you can shake a stick at. I know for a fact they have no idea where their money is invested. Bet my parents might have some money going through those banks. Sure the guy at USB tells them his is looking out for them.
Jim, Foolish Literalist
Did they qualify that with “as an adult”? Otherwise I think that’s a statistically improbable number of home-schooled only children in one room. Were they all in bubbles?
Tommy
@raven: I think somebody might have lied there.
raven
@Jim, Foolish Literalist: Actually they did.
Corner Stone
@Tommy:
What’s stopping them?
gocart mozart
oooh, somebody is gonna get their wrist slapped soon, just you wait and see.
a hip hop artist from Idaho (fka Bella Q)
@raven: Did they toss you after you told them? And what did you tell them about the fights?
@raven: “As an adult” is exactly the qualification I’d have added, so I just assumed they did.
Tommy
@Corner Stone: I knew I should not have posted that …
My mom and dad are highly educated people. I am kind of. I learned a long time ago that just because I worked for EDS, Lucent, HP, Oracle I could not invest in technology. I thought I worked in the industry I could invest in it. I was so wrong.
Just because my parents have money does not mean they are good with money.
Villago Delenda Est
@a hip hop artist from Idaho (fka Bella Q): “Well, I was in this bar in Korea, and some drunk GI collapsed on my table, and then he started thrashing around, and I’d had a few myself, and I thrashed back, and then ten minutes later the MPs showed up and remanded us all to the custody of our first sergeants.”
Or words to that effect.
I actually almost got involved in a situation like that, being a person holding a commission while some SP4 was being belligerent in a bar in Itaewon. His buddies convinced me (they said all the right things) not to get “officially involved” in it, saying they’d get him back to the barracks to sleep it off. Mind you, I was in civvies at the time but a lot of enlisted soldiers can detect an officer near them at 50 meters. Something about the posture, etc.
Corner Stone
@Tommy: What are EDS or Lucent?
Ehlers–Danlos Syndrome? Sounds not very pleasant.
Jim, Foolish Literalist
@Corner Stone: ISn’t EDS Ross Perot’s outfit? He’s been blessedly quiet for the last few years
Villago Delenda Est
@Jim, Foolish Literalist: Yeah EDS was Ross Perot’s outfit.
Lucent is a company that Fiorina drove into the ground before she attempted the same thing at HP.
Tommy
@Villago Delenda Est: Yes to all you. Maybe I worked for failed companies for a living.
Villago Delenda Est
BTW, Lucent was the name that the spinoff Bell Labs (who did the R&D for Ma Bell, which should be the basis of a pretty successful company) adopted once they were on their own.
A brown coffee stain of quality crater now, smoke has probably died down.
EDS: Electronic Data Systems, which was all big iron in service to government at all levels before the PC revolution and the Internet rendered big iron pretty much obsolete.
Jim, Foolish Literalist
@Tommy: you made me curious so I went and checked the top holdings on my Vanguard funds. I was shocked to see no Apple and lots of Microsoft. I’m about done with my own stock picking. Turns out I am not good at it.
SRW1
@burnspbesq:
Just for your information: I am aware of two countries in Northern Europe in which it is longstanding tradition that once a year you can read about the taxable income of your neighbours in the newspapers.
raven
@a hip hop artist from Idaho (fka Bella Q): When he asked me “can you tell me about that” I said, “uh, for a few years after I came home it was pretty regular”. I was dismissed but not until the end of the day. The thing is I’ve been on three criminal and one civil and I always am truthful about my background. I think ya just never know. The worst thing was the woman next to me. She was terrified she was going to get on a jury because she had a 4 year old and no child care. She had been the victim of domestic violence and went to pieces when questioned. It took until late in the day for me to get her to talk and, when she did, I think I was able to help her feel better. I knew there was no way they were going to seat her and assured her of such. I was really happy when they didn’t.
Cervantes
@catclub:
What made the difference was the courts deciding in the ’70s and ’80s that ATMs were not technically bank branches. With that distinction in hand, banks began to form intra-state and inter-state networks, and then global ones.
xenos
@burnspbesq: if they are publishing the name of the French guy who stole all the lux leaks documents ftom PWC, I have not been able to find it. They report on the proceedings but do notn name him. Maybe after he is convicted. ..
opiejeanne
@Jim, Foolish Literalist: That’s the reason I pay someone to advise me on handling our money.
Many years ago my husband bought IBM stock, against the advice of his broker. The thing made a lot of money quickly, and he got out, and then he watched it soar and split and rise some more. He agonized over that early sale for months, watching it go higher and higher, wishing he’d held on a bit longer.
I handed him a short story (O. Henry?) about a young couple who are interested in stocks and decide to follow one (or two?) and keep track of it, in order to understand the market, without investing in it. Every day they logged the results from the newspaper and when it went up they were delirious, when it went down they were sad; they watched this stock for years and that one block of unpurchased stock eventually became very valuable, worth a small fortune; then one day it crashed, and they were devastated; it was as if they had lost their own money. Their entire happiness was destroyed even though they had never risked a cent.
I inherited a bit of money a few years ago and I try not to look at the balance too often. If I looked at the reports every day, like my husband was doing at first, I would have absolutely gone nuts.
opiejeanne
@SRW1: Is one of them Iceland?
opiejeanne
@raven: In California if you have a young child you are excused automatically. I wanted to serve the two times I got called when I had little kids, but made the mistake of answering truthfully that I had them. I offered to pay for babysitting but they smiled and excused me.
raven
@opiejeanne: Ah, interesting.
Lurking Canadian
HSBC is clearly a criminal enterprise. The FBI should seize the whole fucking bank under RICO. They can prove to the judge how much of it they should be allowed to keep.
Bitter Scribe
They serviced drug cartels, arms dealers, tax evaders and fugitive diamond merchants, but they sold my credit card account to CapitalOne? Wow. I really feel rejected.
Amir Khalid
@Another Holocene Human:
It’s six hours since you posted your question so I don’t know if you’ll see this. But yes, Malaysia does have human-rights problems. “Serial human rights abuser” seems an emotive term to me, and to my knowledge there’s worse countries than us. But we do have no-trial detention (introduced by the Brits during the Emergency and kept around as a handy tool), institutionalised racial discrimination in favour of one group, distinct gaps in our freedom of expression, interference in the religious expression of non-Muslims (as VDE has pointed out) among other things.
Cervantes
@Amir Khalid:
Not to mention the notorious case being decided today.
Another Holocene Human
@Amir Khalid: Wow, icky. Thanks for answering. I was in meetings so I’m online briefly.
Is Malaysia a potential bad actor in a trade alliance with the US? Are Malaysia’s limits on free expression going to lead to a crushing of labor interests (Bangladesh style!) and create blowback for the labor movement in the States?
Labor’s position in the US has just been eroded and eroded and eroded since 1980 and worker’s income and lives have been negatively impacted as a result. I understand the fear. But I wonder if Malaysia has more to worry about in a trade deal with the US than the other way around? (US has been terrible in these trade deals before. Of course, when we opened the gates to Chinese textiles, whoop, there go our US sweatshops, horrid business but those people do miss those jobs. As far as environment goes UMass developed cheap ways to cut paper pulp pollution right when Holyoke, MA paper industry shut down because China ate their lunch, and I understand pollution there is a mother. So these fears aren’t unfounded by any means.)
Am I wrong to call ‘chicken little’ here?
Another Holocene Human
Is no trial detention different from our backdoor poor house where people get arrested (following indictment or not), see the judge, can’t make bail, and live in the jail house for months
and months
and months
sometimes becoming disabled (or dead!!) through actions of guards, still no trial, sometimes for funsies they just drop charges and go “bye, have a nice life”
I guess I’m assuming this is more political and maybe more like French/Italian system where there aren’t as many institutional and bureaucratic barriers between law enforcement and the judicial apparatus.
opiejeanne
@raven: during jury selection they asked for a show of hands for any relatives of cops, lawyers, victims of domestic abuse, etc. and excused them en masse. That was out of about 60 of us, and that excused about fifteen. Then they started interviewing the rest of us.
catclub
@Lurking Canadian: Seize under asset forfeiture and make HSBC prove what is not the result of criminal acts. Works for south Texas Sheriffs!
E.Snowden
@Mandalay:
It would appear that for some the ideas of what ‘privacy’ is, or what constitutes ‘guilt’ is somewhat relative. Dare I say, subjective.
Joel
@Berial: was never going to happen. The tea party is just rebranded hardline republicanism. They are populists in only the narrowest of senses. Their issue with Bush is that he left a loser’s legacy, not anything he did.
Chris
@Berial:
@Joel:
The teabaggers have no idea what they believe until they’ve gotten it from Sarah Palin, Rush Limbaugh or whoever their stars of the moment are. If you can drop all the labels and tribal markers and get to a point where you’re simply getting them to answer “what do you want [the government to be doing],” I’ve met more than a few conservatives who will think their way to liberal solutions. It never lasts past the moment when they discover that they are, in fact, liberal solutions, at which point they simply revert to parroting whatever the relevant talking points are. And so much for whatever the fuck they believed ten seconds ago.
So yeah, I’m sure there were right wingers who in the confusion of late 2008, believed that something had gone terribly wrong with the banking sector and something should be done about it. But that was never going to last past the introduction of their newest generation of icons telling them who’s really responsible and why such anticapitalist thoughtcrime is really namby-pamby latte-sipping Volvo-driving liberal elitism.
SRW1
@opiejeanne:
Nope. Don’t know about Iceland. The ones I am aware of are Sweden and Finland.