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A Bit of Good News Amidst the Horror . . .


Money to Burn

COMMENT: With all of the horrors unfolding around the world, a bit of good news might be welcome. Amidst all the “progressive” and right-wing carping about Obama, a significant piece of information has [understandably] been overlooked.

The story below might not appear very significant at first glance. Buried well down in the story, however, is a fascinating detail. The money laundering network being pursued and prosecuted by the Justice Department dates back to 1953!

That is the time period in which the Office of Policy Coordination and CIA were busily setting up intelligence fronts around the world, the period in which the Bormann network was beginning to channel money back into Germany in order to begin “the German economic miracle,” and the period in which organized crime elements in the U.S. (often in conjunction with intelligence agencies) were ramping up their drug smuggling networks.

The implications of Obama’s Justice Department attempting to interdict this network is considerable.

“Charges for Four in Swiss-Tax Case” by Thomas Catan and Evan Perez; The Wall Street Journal; 2/24/2011.

EXCERPT: The U.S. charged four former Credit Suisse AG bankers Wednesday with helping wealthy U.S. citizens evade taxes, opening a new front in its multi-year battle with Swiss banks over secret accounts.

The grand jury indictments follow the recent arrest of a fifth Credit Suisse banker in the U.S. and show the U.S. is widening its crackdown of secret bank accounts in Switzerland and elsewhere following a bruising battle with UBS AG.

The long-running U.S. probe has so far focused on the Swiss operations of major global banks such as HSBC Bank PLC. and Credit Suisse, as well as several boutique Swiss banks. Now the investigation could be widening to encompass U.S. banks that helped them move the funds around the world, according to one U.S. official. . . .The indictment also alleges that the conspiracy dated back as far as 1953 and included second-generation clients that in some cases had inherited the accounts. [Italics are mine–D.E.] . . .

Discussion

3 comments for “A Bit of Good News Amidst the Horror . . .”

  1. I’m sure these two traders were just a couple of bad apples…nothing to see here:

    Credit Suisse one percenters David Higgs and Salman Siddiqui admit fraud in subprime mortgage scandal
    Both men will cooperate in wider fed probe of subprime mess

    By Richard Schapiro / NEW YORK DAILY NEWS
    Published: Wednesday, February 1, 2012, 2:50 PM
    Updated: Wednesday, February 1, 2012, 2:51 PM

    Two disgraced Credit Suisse traderspleaded guilty Wednesday to cooking the books and other counts tied to the subprime mortgage crisis — and agreed to rat out other fraudsters.

    David Higgs, a former London-based managing director, and Salmaan Siddiqui, who worked in Manhattan, admitted to inflating figures in order to advance in the firm and boost their bonues.

    They did all this all as the housing market collapsed.

    “I was directed by my bosses and my boss’s bosses,” Siddiqui said.

    They admitted to conspiracy to falsify books and records and commit wire fraud.

    Both face up to five years behind bars and have agreed to cooperate in the federal proble.

    Others are expected to be charged in the investigation, which focuses on shady dealings at the bank between 2007 and 2008.

    The case, one of only a handful brought over charges linked to the subprime mortgage market, focuses on exaggerations brokers made about the value of the securities.

    The feds say brokers duped investors into pouring cash into the poisoned securities market for sub-prime mortgages by making it appear like it was thriving.

    Higgs said he started hiding losses in 2007, just when the U.S. real estate market started to crumble.

    Rather than marking the securities down to market “as we were required to do,” Higgs said, he and others manipulated the numbers to disguise the losses.

    The ensuing sub-prime mortgage crisis triggered the financial meltdown in the fall of 2008, which cost thousands of Americans their jobs and homes.

    Huh, and this whole time we were told that it was just those poor people taking out subprime loans to buy homes they couldn’t afford that caused the housing crisis. I guess the people pushing that line might be lying in order to protect the banksters.

    Posted by Pterrafractyl | February 1, 2012, 2:37 pm
  2. http://dealbook.nytimes.com/2015/02/09/hsbc-shares-decline-amid-swiss-tax-avoidance-claims/?_r=0

    HSBC Under Renewed Scrutiny Over Swiss Tax Avoidance Claims
    By Chad Bray
    February 9, 2015 6:08 am February 9, 2015 6:08 am

    LONDON — HSBC found itself under fire again on Monday after news reports over the weekend provided more details about long-running accusations that its Swiss private banking arm helped clients hide billions of dollars in assets from international tax authorities before 2007.

    In a report released on Sunday, the International Consortium of Investigative Journalists, an organization based in Washington, along with the newspaper Le Monde in France, The Guardian in Britain, the BBC program “Panorama” and CBS News’s “60 Minutes,” said that secret documents revealed that bank employees had reassured clients that HSBC would not disclose details of their accounts to tax authorities in their home countries and discussed options to avoid paying taxes on those assets.

    The documents were stolen from HSBC by a former employee in Switzerland in 2007 and were given to the French authorities, who in 2010 shared them with officials in Britain, Spain and the United States, among other nations. Some of those jurisdictions have used the information to seek back taxes and penalties from individuals, and the British bank has paid fines to the United States related to those disclosures.

    The journalists’ report, based on account information that dated to 2007, said the Swiss unit’s clients included politicians, actors, rock stars and individuals with ties to arms dealers and traffickers of so-called blood diamonds, which are mined in war zones and sold in violation of international bans.

    The revelations are the latest embarrassment for HSBC, which is facing investigations into the past activities of its Swiss unit by the authorities in Argentina, Belgium and France, and which is thought to be facing a similar inquiry in the United States.

    In a long response, HSBC said that the lender’s Swiss operations “have undergone a radical transformation” in recent years and that tax reporting obligations in the past had fallen to individuals, rather than to their banking institutions.

    “We have 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 said. “We have also refocused our Swiss private bank on clients from strategic markets of the group, such as owners and principals of the group’s commercial banking clients. As a result of this repositioning, HSBC’s Swiss private bank has reduced its client base by almost 70 percent since 2007.”

    HSBC also said that it was fully committed to exchanging information with tax authorities and was “actively pursuing measures that ensure clients are tax transparent, even in advance of a regulatory or legal requirement to do so.”

    Shares of HSBC fell 2.2 percent, to 6.07 pounds, or about $9.25, a share in midafternoon trading in London on Monday.

    “Panorama” was expected to air its half-hour documentary, “The Bank of Tax Cheats,” on Monday evening in Britain.

    The documents were taken by Hervé Falciani, a former information technology employee of HSBC in Switzerland. Mr. Falciani, who now lives in France, is facing criminal charges in Switzerland for breaching that country’s bank secrecy laws.

    Mr. Falciani turned over the documents to the French authorities, and Le Monde then obtained them from a French investigator, according to a “60 Minutes” report that was broadcast on Sunday.

    France later shared the names of potential tax evaders in 2010 with tax authorities in Britain, the United States and other countries. That list is often referred to as the Lagarde list, referring to Christine Lagarde, the head of the International Monetary Fund and France’s finance minister at the time it was circulated.

    Tax authorities in Britain, France and Spain have since recovered more than £500 million in back taxes and penalties from individuals, according to the consortium.

    But Margaret Hodge, a Labour politician and the chairwoman of the Public Accounts Committee, which oversees Britain’s tax authorities, continued her criticism on Monday of Her Majesty’s Revenue and Customs, the country’s tax collection agency, for not extracting more prosecutions and recovering more money using the HSBC data.

    In a radio interview on BBC’s “Today” program, Ms. Hodge also said that Stephen Green, the former HSBC chairman and Conservative politician, should face questions over his knowledge of the bank’s practices. Mr. Green left HSBC in December 2010.

    “Either he didn’t know and he was asleep at the wheel, or he did know and then he was therefore involved in dodgy tax practices,” Ms. Hodge said in the interview. “Either way, he was the man in charge, and I think he has got really important questions to answer.”

    More questions about the British government’s response to the HSBC tax activities are expected on Wednesday when Lin Homer, the chief executive of Her Majesty’s Revenue and Customs, will appear at a previously scheduled hearing before the Public Accounts Committee.

    A spokeswoman for the committee said there were currently no plans to call Mr. Green to testify. Mr. Green has previously declined to comment on the situation. Calls to his office on Monday were not immediately returned.

    A spokesman for the British tax collection agency said on Monday that it had used the data to collect more than £135 million in back taxes and penalties and that the government had increased the maximum penalty an individual faces for hiding money overseas to 200 percent of the tax evaded. Those agreements, which are civil in nature, remain confidential.

    “We have systematically worked through all the Lagarde data,” the tax office spokesman said. “As a result, tax, interest and penalties have now been paid by those who hid their assets in Switzerland to get out of paying tax.”

    “The decision to prosecute is made by the Crown Prosecution Service based on the facts,” he said.

    The spokesman also noted that British tax authorities, through information obtained from whistle-blowers and agreements with Switzerland and Liechtenstein, have recovered about £2 billion in previously unpaid taxes.

    The latest revelation comes as the United States and other countries have aggressively pursued individuals who try to hide assets overseas and the financial institutions that assist them.

    Since 2009, the United States has prosecuted dozens of individuals criminally who have failed to come forward regarding their undisclosed assets and has pursued criminal charges against several Swiss bankers who assisted them.

    In recent years, UBS, Credit Suisse and Wegelin & Company, at one time Switzerland’s oldest operating bank, all reached settlements with the United States over their role in helping wealthy Americans hide assets overseas.

    In May, Credit Suisse agreed to plead guilty to criminal wrongdoing and pay $2.6 billion in penalties.

    In November, HSBC agreed to settle an investigation by the Securities and Exchange Commission regarding how its Swiss private banking unit had solicited and provided advice to American clients, with the unit paying a $12.5 million fine and admitting wrongdoing.

    That same month, the Belgian authorities charged HSBC’s Swiss private banking arm with assisting wealthy individuals to avoid paying taxes dating to 2003, and the unit was placed under formal investigation by French magistrates examining whether the bank had helped wealthy clients to avoid French tax reporting requirements.

    The authorities in Argentina have also accused the Swiss unit of assisting clients in avoiding taxes in the South American country.

    In 2012, after a lengthy investigation, the bank agreed to pay $1.92 billion to the United States authorities to settle accusations that it had transferred billions of dollars for nations like Iran and had enabled Mexican drug cartels to move money illegally through its American subsidiaries. The bank entered a deferred prosecution agreement with the Justice Department and the Manhattan district attorney’s office as part of that settlement.

    Posted by Vanfield | February 9, 2015, 1:08 pm
  3. The higher they fly, the harder they fall…into a pile of riches and alibis:

    BBC News
    HSBC bosses apologise for ‘unacceptable’ practices
    25 February 2015 Last updated at 10:51 ET

    The two top HSBC bosses have apologised for “unacceptable” practices at its Swiss private bank which helped clients to avoid tax.

    Stuart Gulliver, group chief executive, said it had caused “damage to trust and confidence” in the company.

    He and chairman Douglas Flint were answering questions from UK Members of Parliament.

    Mr Flint said he felt shame and would “take his share of responsibility” for Swiss private bank failings.

    When asked about the list of allegations and investigations into HSBC by international regulatory authorities Mr Flint said: “it’s a terrible list.”

    Despite reforms, he said he could not exclude the possibility of further problems emerging,

    He said the task of reforming HSBC will “always be ongoing”.

    When asked by MPs who was most responsible for the problems in HSBC’s Swiss private bank, Mr Flint said: “The individuals most accountable for the data theft and the behaviour that was unacceptable to our standards, was the management in Switzerland.

    “Most culpable were the relationship managers [in the Swiss private bank].”

    Mr Flint estimated that some 30% of those relationship managers were still employed by HSBC.

    No tax purpose

    Mr Gulliver, who has worked for HSBC for 35 years and became chief executive in 2011, told the committee that his personal holding of a Swiss bank account through a Panamanian company had “no tax purpose”.

    He said the arrangement only reflected a desire for privacy from his colleagues at HSBC in Hong Kong.

    He said: “It was purely about privacy from colleagues in Hong Kong and Switzerland. We had a computer system back in the day that allowed everybody to inquire into staff accounts … I was amongst the highest paid people and I wished to preserve my privacy from colleagues. Nothing more than that.”

    Mr Gulliver told the committee he had “followed the letter of the law” of the UK non-domicile rules,

    He said: “The important point is I’ve paid UK tax on my HSBC earnings during that entire period [since being based in the UK], so the amount of tax I have paid is the fair and appropriate amount.”

    Wow, that article was just packed with gems. Which one was the best? Take your pick:

    Despite reforms, he said he could not exclude the possibility of further problems emerging,

    He said the task of reforming HSBC will “always be ongoing”.

    “Most culpable were the relationship managers [in the Swiss private bank].”

    Mr Flint estimated that some 30% of those relationship managers were still employed by HSBC.

    Mr Gulliver, who has worked for HSBC for 35 years and became chief executive in 2011, told the committee that his personal holding of a Swiss bank account through a Panamanian company had “no tax purpose”.

    He said the arrangement only reflected a desire for privacy from his colleagues at HSBC in Hong Kong.

    He said: “It was purely about privacy from colleagues in Hong Kong and Switzerland. We had a computer system back in the day that allowed everybody to inquire into staff accounts … I was amongst the highest paid people and I wished to preserve my privacy from colleagues. Nothing more than that.”.

    There’s a lot of competition for the most precious gem, but the argument that HSBC CEO Stuart Gulliver was using a Swiss bank account through a Panamanian company because he wanted to hide his income from his colleagues, but not anyone else, THAT just might be the most precious gem of them all.

    Speaking of precious gems…

    Posted by Pterrafractyl | February 25, 2015, 1:50 pm

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