Banking Gaint HSBC sheltered cash linked to dictators and arms deal plus more shady dealings

Secret documents reveal that global banking giant HSBC profited from doing business with arms dealers who channeled mortar bombs to child soldiers in Africa, bag men for Third World dictators, traffickers in blood diamonds and other international outlaws.The leaked files, based on the inner workings of HSBC’s Swiss private banking arm, relate to accounts holding more than $100 billion. They provide a rare glimpse inside the super-secret Swiss banking system — one the public has never seen before.The documents, obtained by the International Consortium of Investigative Journalists via the French newspaper Le Monde, show the bank’s dealings with many clients engaged in a spectrum of illegal behavior, especially in hiding hundreds of millions of dollars from tax authorities.Miners dig for diamons in Zimbabwe. As a compact, stable, and transferable store of value, diamonds offer enormous advantages to smugglers, money launderers, and tax evaders.HSBC revelations shine light on secretive diamond worldUK shadow chancellor Ed Balls: “Why, in the five years since this government was first given information about how HSBC helped people evade tax, has there only been one prosecution out of 1,100 individuals identified?” Oxfam calls for European action on HSBC revelationsDavid Hodgkinson became chair of AIB Former senior executives at HSBC later went on to take up positions in IrelandRecordsThey also show private records of other clients including famed soccer and tennis players, cyclists, rock stars, Hollywood actors, royalty, politicians, corporate executives and old-wealth families.These disclosures shine a 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, one of the world’s largest banks.The leaked account records show some clients making trips to Geneva to withdraw large wads of cash, sometimes in used notes. The files also document huge sums of money controlled by dealers in diamonds who are known to have operated in war zones and sold gemstones to finance insurgencies that caused untold deaths.HSBC, which is headquartered in London and has offices in 74 nations and territories on six continents, at first insisted that ICIJ destroy the data.Late last month, after being informed of the full extent of the reporting team’s findings, HSBC gave a final response that was more conciliatory, telling ICIJ: “We acknowledge that the compliance culture and standards of due diligence in HSBC’s Swiss private bank, as well as the industry in general, were significantly lower than they are today.”The written statement said the bank had “taken significant steps over the past several years to implement reforms and exit clients who did not meet strict new HSBC standards, including those where we had concerns in relation to tax compliance.”The bank added that it had refocused this part of its business. “As a result of this repositioning, HSBC’s Swiss private bank has reduced its client base by almost 70 per cent since 2007.”How the offshore banking industry shelters money and hides secrets has enormous implications for societies across the globe. Academics conservatively estimate that $7.6 trillion is held in overseas tax havens, costing government treasuries at least $200 billion a year.“The offshore industry is a major threat for our democratic institutions and our basic social contract,” French economist Thomas Piketty, author of Capital in the Twenty-First Century told ICIJ.“Financial opacity is one of the key drivers of rising global inequality. It allows a large fraction of top income and top wealth groups to pay negligible tax rates, while the rest of us pay large taxes in order to finance the public goods and services (education, health, infrastructures) that are indispensable for the development process.”Tax tacticsThe secret files obtained by ICIJ – covering accounts up to 2007 associated with more than 100,000 individuals and legal entities from more than 200 nations – are 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. Nations whose tax authorities received the French files include the US, Spain, Italy, Greece, Germany, Britain, Ireland, India, Belgium and Argentina.It’s not illegal in most countries to maintain offshore bank accounts, and being identified as holding an HSBC Private Bank account is of itself no indication of any wrongdoing.Some who are named in the files may have had some connection to a Swiss bank account, such as a power of attorney, while not owning the money in the account, or owning only a share of it. Others in the files may not even have had a Swiss bank account.Read more about CORRUPT BANK HSBChttp://www.irishtimes.com/business/financial-services/banking-giant-hsbc-sheltered-cash-linked-to-dictators-and-arms-dealers-1.2095966

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Darryl February 10, 2015 at 7:46pm

Thanks for pointing this out, Krishna! I'll see your call and raise it another level! Check out this video which confirms your post: HSBC & the Largest Money Laundering Fine Ever!
Krishna Kalki February 9, 2015 at 9:43pm

Now this is serious .. the point is not to trust bank staff ..the Bank building is ok but the bank staff are corrupt ...you know what I mean

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