U.S. likely to get peek at HSBC accounts
The revelation that an ex-employee of HSBC Holdings Plc stole tens of thousands of its Swiss accounts is likely to give U.S. tax authorities fresh clues in their pursuit of wealthy tax cheats abroad.
HSBC
U.S. authorities are likely negotiating with the French through a treaty request to get the names of any U.S. clients, lawyers said on Friday. That would provide leads as they seek tax evasion prosecutions beyond the UBS affair.
Giant Swiss bank UBS AG
To the extent the HSBC data includes U.S. based taxpayers having interests in HSBC foreign accounts, it is a virtual certainty such information will be delivered to the U.S. government, said Chuck Rettig, an attorney representing U.S. clients of UBS, HSBC and others who held previously undisclosed accounts.
An Internal Revenue Service spokesman declined comment.
While no government wants to condone theft, the Swiss have shown they need to be pushed to hand over information about U.S. clients who might be evading taxes, said Peter Henning, a former Justice Department lawyer in its criminal division, and now a professor at Wayne State University.
Frankly, I don't think the U.S. is all that concerned about bruised feelings of the Swiss authorities, Henning said.
Tense negotiations to settle the U.S. government's civil case against the bank dragged on for nearly a year before a deal was struck in which UBS agreed to hand over 4,450 account names last year.
Up until the end, Swiss officials loudly defended the right of UBS to maintain privacy for its clients.
There is precedent for the sharing of tax information among countries. Germany paid for data stolen from Liechtenstein's top bank, LGT, in 2008. That data is believed to have wound up in U.S. hands.
Regardless of the number of U.S. accounts within the 24,000 HSBC names, the U.S. would gain valuable insight from a look at the data, Henning said.
For example, it would see what types of accounts were held, in what regions, and how HSBC's Swiss banking operation worked.
That information could be very helpful to the DOJ (Department of Justice) in giving them a road map for their investigations, he said.
HSBC has not been accused of any wrongdoing, but the IRS and DOJ have said they are looking at patterns within the data it has acquired to potentially go after other bad actors.
About 15,000 U.S. citizens with offshore accounts came clean under a voluntary amnesty program last year, giving authorities a trove of information with which to hunt.
WATCHING WITH GLEE
U.S. prosecutors are gleefully watching events in Europe.
Last week, a Department of Justice lawyer working on the UBS and other tax crime cases said data thefts at HSBC and elsewhere are leading more whistle-blowers to come forward to U.S. authorities.
A lot of folks, and they seem to be IT (information technology) people, see what's happening in Germany and France and are coming to the U.S. with information, Kevin Downing, a top DOJ lawyer said to a group of private and government lawyers at a conference in Washington last week.
We welcome these guys; please come in, Downing said with a smile.
Ex-HSBC employee Herve Falciani is reported to have attempted to sell the data to Germany for about $3.39 million.
Germany's Finance Minister, Wolfgang Schaeuble, last month said Berlin was prepared to pay for stolen data on potential tax cheats at an unnamed Swiss bank.
HSBC had previously said less than 10 clients were affected after Falciani -- a former HSBC computer specialist -- stole client data.
Alexandre Zeller, CEO of HSBC's private bank in Switzerland, said Falciani transferred data onto a personal computer and fled to neighboring France while under investigation. French authorities then raided his house and confiscated the data.
(Additional reporting by Steven Slater and Laura MacInnis)
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