Bankster whistleblowers Herve Falciani & Rudolf Elmer

[TonyGosling]

Wednesday 04 Dec 2013
An exclusive interview with the Edward Snowden of banking

It was the biggest bank heist in history, not of money or gold bullion, but something far more important – data – and it all stems back to one man, who worked in one branch of just one bank.

For the first time the IT expert who took details of tens of thousands of client accounts from Britain’s largest bank tells his full story.

European authorities say that Herve Falciani’s list contains 127,311 client account details. HSBC says this is an exaggeration, saying that 15,000 clients were affected. Mr Falciani, the French-Italian former HSBC employee has given an exclusive interview to Channel 4 News about how he downloaded “the entire memory of the bank” at HSBC’s private bank in Geneva.

The data leak has caused havoc around the world, forming the basis of the “Lagarde List” in Greece, and led to hundreds of millions in unpaid taxes being repaid in Spain, France and the UK.

Mr Falciani’s data was used by a Senate investigation into HSBC that led to the bank being fined $1.9bn.

Last month a cartel of Belgian diamond dealers was raided partly based on evidence from the list.

Celebrities, bankers, politicians, tax evaders, and drug traffickers have featured on the list now being investigated by tax and criminal authorities around the world.

A ‘trap’ that revealed data

Mr Falciani is in hiding in southern France for his own security, and was the subject of an Interpol manhunt red alert after Swiss authorities tried to extradite him.

In fact he revealed to me that the efforts by the Swiss to apprehend him, led to the release of the data: “of course it was a trap.. on both occasions they thought it was a way to hide, but in the opposite it was a way to reveal”.

Mr Falciani said that Government minister Lord Green, chief executive and then chairman at HSBC in the mid 2000s could have and should have done more to put in place stronger financial controls at the bank: “He could have done more; he should because I know it’s required.”

Channel 4 News has also seen new details about the 127,000 client accounts from around the world: individuals, corporates, trusts, societies, and professional authorities.

There are nearly double the number of UK client accounts than HMRC has investigated, and many more linked to UK overseas territories. Mr Falciani tells Channel 4 News that he is surprised that the UK authorities have not contacted him for help exposing undeclared income and potential criminality.

This is a story of control. Control within a bank, a lack of control of banks, and a loss of control over bank data. It is extraordinary enough, but there are more stories from this pot of bank data still to come.

HSBC say that Falciani stole the data, tried to sell it, and is now exaggerating its importance.

Herve Falciani has already been imprisoned (later freed) and says he is prepared to go back to jail to expose the lack of control in our financial system:

“But of course I’m not afraid, I’m not afraid about nothing in the end. I know I’m right and I know I have just to share it with citizens if politicians don’t want.”

We asked for comment from Lord Green. His office referred us to HSBC. The bank told Channel 4 News that there is no record of Mr Falciani raising the alarm to his managers, and claims that he tried to sell the stolen data.

In a statement it says:

“HSBC has estimated that 15,000 existing clients were impacted”.. and insists: “client numbers are exaggerated”, “HSBC complies with the law in all the territories in which it operates… ”

HMRC says it has done everything possible with the data it has received.

In a statement it told us:

“We have examined all individuals and businesses identifiable from the data. About 40 per cent of those challenged so far have proven to be tax compliant. Wherever we find evidence of evasion by hiding assets offshore we relentlessly pursue them without exception”.

Follow @faisalislam on Twitter.

- See more at: http://blogs.channel4.com/faisal-islam-on-economics/exclusive-man-stol e-memory-bank/19832#sthash.L3mr12ix.dpuf

[TonyGosling]

THE WORMHOLES OF THE WORLD ECONOMY
Monday, December 2, 2013
The secrets of the vaults

Hervé Falciani, a native of Monaco, who in 2008 walked out of the Geneva office of the HSBC bank with the details of more than 130,000 tax evaders with Swiss bank accounts.
By Ivan Briscoe - For the Herald
http://www.buenosairesherald.com/article/146546/the-secrets-of-the-vau lts

THE HAGUE — If there is one thing on which the left and right seem to agree on in modern Europe, it is that something must be done to stopper up the worm-holes of the world economy. Not the towers of the City of London, nor the gleaming glass of Dubai, but the sort of strange, empty, fly-blown places that appear to have taken miraculous control over money and manpower as if these had fallen under zombie possession.
Take the one-storey building in downtown Wilmington, Delaware: the receptionist shoos away unwanted visitors, but that doesn’t stop 278,000 companies from finding it to be a comfortable home. Overcrowded premises, you think? This does not seem a problem in the Cayman Islands, home to an estimated 120 subsidiary units of Barclays Bank, among many others, despite a population of just over 50,000. Or what of Phil Williams, owner of an abandoned kitchenware shop in the Welsh capital of Cardiff? According to the latest edition of the magazine Private Eye, Mr Williams was quite bewildered to have found that his shop is also the listed address for some of the Ukrainian elite’s most innovative financial boutiques.
These oddities had until recently become part of the furnishings of the global economy, a kind of dirty open secret that was tolerated by governments and praised by ultra-liberals as essential tunnelling for foreign capital flows. But the economic crisis has not been kind to the cause of these tax havens. With hard-up governments probing every little bit of economic muscle to see if it can be taxed a tad more, the ability of global corporations such as Starbucks, Amazon and Vodafone to divvy up their earnings so as to pay the minimum possible, or for individuals to park their deposits somewhere beyond the Sargasso Sea, has become a raw nerve to the general public.
So the question is not whether to clamp down on the havens, but how far to go and how deep to plunge. British Prime Minister David Cameron, pragmatic in all matters except his self-belief, took the matter to the G8 meeting in Northern Ireland in June, extracting promises of automatic exchange of information between tax authorities and a pledge to constrain the global wanderlust of corporate accountancy departments.
Signs of movement have since been palpable. At the end of last week, Costa Rica and the Cayman Islands joined the list of a dozen countries that have agreed to hand data on offshore bank accounts to US tax authorities; Switzerland, the largest haven on the planet and home to over US$2 trillion in foreign assets, also agreed to a disclosure plan with Washington a few months ago. British overseas territories, also huge players in the offshore business, have signed up to a new code of principles.
However, in the minds of many who follow the abstruse debate over international tax policy, these proclamations are situated at the bottom of a cliff-face. As The Economist warned after the G8’s resolutions, “it remains to be seen... whether any of this makes a meaningful difference to the amount of tax paid by companies. Cross-border corporate taxation is fiendishly complex, the lobbying around it furious.”
A sense of the immensity of the job and the futility of many tax-clawing campaigns is gleaned from the industry’s own whistleblowers. Whereas state intelligence has been outflanked by Edward Snowden or Chelsea Manning, global banking has endured its own inside nemeses — a little more ethically dubious, and not nearly so famous, but with revelations that have already initiated major scandals.
Hervé Falciani, a native of Monaco, is reportedly watched over by three French bodyguards after the government in Paris agreed to provide for his safety. Falciani, it is safe to say, has some wrathful enemies, above all in Switzerland. First and foremost, there is the HSBC bank and its Geneva office, which he left in 2008 armed with the names and details of some 130,000 account-holders. Although his critics claim he is out for the cash (“Always he is asking. He is not Robin Hood,” said a former colleague of his quoted by the New York Times), the evidence he provided has led to the defenestration of the bank’s top executives once the US Senate accused them of laundering over one billion dollars in Mexican drug money. Likewise, his files have enabled Spanish authorities to identify over 600 tax evaders. It is also his data that led to the composition of one of Greece’s most incendiary documents: the “Lagarde list,” with the names of 2,000 leading Greeks with undeclared Swiss assets.
This, says Falciani, is just the beginning. And it is apparent from recent exchanges with the media that his accusations penetrate far deeper than the dislike for corporate tax avoidance and individual tax evasion espoused by Cameron and his dining colleagues. For Falciani, as for his predecessor in Swiss whistle-blowing, Rudolf Elmer, there is something far more systemically malign in the way banks and brokers enable money to find a safe house. “Banks such as HSBC have created a system for making themselves rich at the expense of society, by assisting tax evasion and money-laundering,” Falciani recently told Der Spiegel.
In the eyes of these accusers, banks do not just go out of their way to park wealth. They are also none too keen on knowing about the difference between unpaid tax and criminal income; according to the United Nations, tax evasion hovers at around 60 percent of a total global illicit income per year of US$2.1 trillion.
Possibly we have always known these facts; never has a Swiss bank account been known for anything but its secrecy. But so long as states stay hungry for cash, the pursuit of haven will have to be undertaken, at least in lip service.