HSBC Banking Leak Shows Tax Avoidance, Dealings With Criminals

An anonymous reader writes: Data in a massive cache of leaked secret bank account files lift the lid on questionable practices at a subsidiary of one of the world's biggest financial institutions. HSBC's Swiss banking arm did the following: Routinely allowed clients to withdraw bricks of cash, often in foreign currencies of little use in Switzerland; Aggressively marketed schemes likely to enable wealthy clients to avoid European taxes; Colluded with some clients to conceal undeclared "black" accounts from their domestic tax authorities; and provided accounts to international criminals, corrupt businessmen and other high-risk individuals. For its part, HSBC admits that it is liable for past transgressions but claims its practices have changed.

Comments

Questionable banking?

[burtosis]

So shady characters were using Swiss bank accounts? Really?

In other news some of the users of the pirate bay were found to be distributing copyrighted material. Also the sun found to be yellow.

Re:Questionable banking?

[Anonymous Coward]

This is what neutrality looks like. It's not supposed to be any of the bank's business how its clients make or spend their money.
Do you want your bank asking you questions about this stuff?

Re: Questionable banking?

[burtosis]

I actually read it yesterday on another site it's kind of older news. Does it really suprise anyone? All those billions of dollars are from only 10k accounts so the % of shady customers probably is reaching 100.

when I was in grade school i was pretty damn sure earth like planets were very common. There had to be countless quadrillions of them at a minimum. It's actually a pretty obvious assumption. But a surprising number of people, given a total lack of evidence at the time of other planets outside our solar system, told me there were none at all. Whenever you have such large systems it isn't really a stretch to take evidence you have from a small sample and extend it to the whole - true it's not proof but you can't rule it out and pretty much by definition is plausible.

Re:Questionable banking?

[NotDrWho]

So shady characters were using Swiss bank accounts? Really?

Laws are for poor people.

Don't believe it? Well, have you seen a single arrest of any HSBC employee for doing any of this? A single arrest for any of the customers who where committing these crimes? And even if you did see an arrest, do you really think they'll get convicted? Actually do any prison time?

HSBC Banking Leak Shows Tax Avoidance, Dealings Wi

[khr]

HSBC Banking Leak Shows Tax Avoidance, Dealings With Criminals

In other words, just another day of business as usual...

Avoiding versus evading

[tompaulco]

Avoiding is not illegal. Evading is illegal. Avoiding paying road tolls is when you take surface streets so you don't have to pay tolls on the highway. Evading paying tolls is when you take the highway put don't put any money in the till when you get to the toll booth.
If the bank is helping clients to avoid paying taxes, then the bank is to be congratulated for providing good sound business advice to their clients and enabling them to take advantage of tax situations set up on purpose by various taxing districts in order to lure business to their jurisdiction. If they are helping clients to evade taxes, then they need to be thrown in jail along with their clients.

Re: HSBC was laundering money for drug cartels

[Anonymous Coward]

So revoke their banking licence and freeze all funds. Make everyone claim funds against a full disclosure.

Proportionality

[PvtVoid]

Not to defend Ross Ulbricht, but given what's coming to light, does anybody really doubt that HSBC enabled more drug trafficking than a dozen Silk Roads? And that's not even counting things like the arms trade and tax evasion.

Steal ten thousand dollars and you go to jail for decades. Steal ten billion and you get a slap on the wrist and an engraved invitation to the next campaign fundraising dinner.

Re:Proportionality

[DarkOx]

Steal ten thousand dollars and you go to jail for decades. Steal ten billion and you get a slap on the wrist and an engraved invitation to the next campaign fundraising dinner.

This is unfortunately the nature of the world. I am afraid the only moral is go big or go home. There is another eerily similar adage about banking. "Borrow a hundred thousand you can't pay back and you have a problem, borrow 100 million you can't pay back and they have a problem." Although you have to adjust the sums for inflation somewhat the basic principle is: rules are only for the little guy.

Re:Proportionality

[Anonymous Coward]

Steal ten thousand dollars and you go to jail for decades. Steal ten billion and you get a slap on the wrist and an engraved invitation to the next campaign fundraising dinner.

Well, not _always_... http://en.wikipedia.org/wiki/B...

Bernie's problem was he stole from the wrong people. If he'd stolen from normal people he'd have gotten off, but he mostly stole from the 1%... that's no allowed in those circles.

Remember, kids..

[BVis]

It's only illegal if you get caught. Even if you DO get caught, remember that rich people don't go to jail.

Prison Time

[StormReaver]

I bet not one of these bankers does any non-neglible prison time.

Re:Prison Time

[gstoddart]

Of course not. Because they're essentially protected by the corporate veil.

So they can do all sorts of malfeasance, and HSBC will say "ooops, sorry", and possibly pay some fines. If they get sacked, they'll still keep their huge bonuses and severance.

The problem with corporations is it more or less encourages people to break the law, since they end up bearing no legal responsibility.

Rich bankers do prison time for ripping people off? Don't make me laugh.

Not a single one of the assholes who ripped off the world leading up to 2008 was charged with anything, despite essentially running an enormous Ponzi scheme to foist off bad debt to other people and make it look like it was AAA rated debt. It was theft, writ large, but not ONE of them was charged.

Because those people advise the government of financial matters.

Being a banker is practically a license to commit fraud on a massive scale, with no personal liability.

Being a banker on a large scale probably means some of the politicians who are supposed to be fixing this probably have an account with you and will give you a wink.

Because the politicians are just as corrupt as the bankers. All of these millionaire politicians are hiding their money in offshore accounts, right along with the drug cartels.

Re:Prison Time

[MickyTheIdiot]

> problem with corporations is it more or less encourages people to break the law, since they end up bearing no legal responsibility.

I know to the guy on the street this seems irrelevant, but this is a major, major issue. It also is backed up by one of the worst pieces of doublethink that you have to believe in corporate culture.

CEO pay is through the roof, and in the US it's always "justified" by the amount of responsibility a CEO supposedly has in a company. However, every time there is a huge case of corporate malfeasance the CEO always claims that he/she had no knowledge of the lawbreaking. So which one is it: does the CEO take responsibility for the company or not?

The best example I know of this in modern life is Rick Scott. He was the CEO of a company that perpetrated the largest fraud in Medicare history. However (at least in the minds of the pro-corporate masses) he didn't even get a scratch on his reputation, let alone get indited for anything. It takes too many mental gymnastics for me to believe that his company's Medicare fraud did not personally enrich him.

To me this seems to be one of the worst societal problems we have to deal with right now. However no one even talks about it.

Regulations?

[conquistadorst]

The Sarbanes-Oxley act has been on the books since 2002. Dodd-Frank bill since 2010. So are they working to keep companies in check and increase transparency? Or just costing both the government and the companies it affects a bunch of time and money? On one side you can say this activity was finally caught. On the other hand you have to ask when large banks are subject to regular audits how do they get away with it from year to year?

From my own limited personal experience, the only thing I can say for sure is that those audits are usually pretty terrible. In theory they're looking for the right stuff, but the auditors themselves are usually green accountants who often lack the hybrid blend of accounting, technical, and IT skills needed to any proper analysis. They don't understand what they're looking at and don't know what to ask for. They usually just follow a sheet of instructions line by line and check those boxes to indicate their work is done. I don't think that quite captures the spirit of those laws.

Re:HSBC Banking Leak Shows Tax Avoidance, Dealings

[Zontar The Mindless]

Many people go so far as to consider taxation theft, and avoidance patriotic.

IOW, many people are self-centred twats.

BTW, I live in a country with one of the highest rates of taxation on the planet (Sweden), and my taxes actually *decreased* a couple of years ago--in the same year that I received a bonus that should otherwise have resulted in me paying about 10% *more*.

So much for your entertaining little theory Which is, as I said, entertaining, but not even worthy of modding down.