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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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