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Ex HSBC employee hopes for widening of Europe tax probe

Herve Falciani, an ex-HSBC employee wanted in Switzerland on charges of stealing data on bank accounts, speaks to the media after a French p
Herve Falciani, an ex-HSBC employee wanted in Switzerland on charges of stealing data on bank accounts, speaks to the media after a French p

By Christian Plumb

PARIS (Reuters) - A former IT analyst from banking group HSBC who provided prosecutors with data on thousands of accounts said in an interview he hoped a Franco-Spanish tax avoidance probe would widen to other countries.

Pursued since 2009 by Switzerland on charges of stealing data from his former employer, Herve Falciani told Reuters he hoped French authorities will team up with prosecutors in countries ranging from Greece to Germany.

"The investigations were blocked in various countries due to a lack of knowledge about the objective and the scale of the problem," he said. "My hope is that several of those will now resume with new directions - we'll see in the coming months."

Falciani, who was accompanied by three bodyguards employed by the French government to give him protection, was speaking in a Paris cafe not far from the landmark Invalides building days after a being questioned for four hours by French lawmakers trying to tighten rules against tax evasion.

A list of clients at HSBC's private banking arm supplied by Falciani, who sports a goatee beard and was smartly dressed in dark blazer, white shirt and jeans, is part of the basis for an investigation by French prosecutors into whether HSBC offered illicit products to help French clients avoid tax in Switzerland.

The probe, launched in April, is one of the latest sign of governments cracking down on tax evasion and money laundering.

HSBC has disputed various aspects of Falciani's story, from his contention that he is a whistleblower - the bank contends he tried to sell the data he absconded with and only cooperated with prosecutors when he was arrested in Spain to face extradition charges.

It also denied any role in helping clients avoid taxes.

"We require existing and new clients to be tax compliant and transparent about their tax affairs and cease relationships where the client is not tax compliant," a spokesman said. "HSBC complies with the law in all the territories in which it operates."

Falciani, who has French and Italian citizenship and who collected data on HSBC account holders when he worked in its information technology department from 2006 to 2008, argued otherwise.

Falciani, who fled to Spain from France in 2009 because he said he feared for his safety, said his hope is that French and Spanish prosecutors will help form a multinational team that could serve as a model for future tax probes against other banks.

VAST POTENTIAL

"We'll need a bit of patience to see which countries will join the team, but the potential is vast," he said, mentioning Greece, Belgium and Germany as possibilities if probes are revived some five years after he turned over to French prosecutors five DVDs with details that eventually revealed $5 billion of undeclared assets.

Falciani, who has made no secret of his feeling that ex-French President Nicolas Sarkozy's administration was less than aggressive in trying to build a case based on the data he provided about French clients, also faulted the former government for failing to cooperate adequately with U.S. investigators.

"It's unfortunate that for years the possibility of cooperation was blocked locally," he said. "There is still an enormous amount to do", on the U.S. front, he added, saying he was eager to play a part either directly or via his talks with French prosecutors.

HSBC in December agreed to pay a record $1.9 billion to resolve charges it allowed drug cartels to move vast proceeds through the bank from Mexico.

But Falciani said that could be just the beginning. The Monaco-born systems analyst has said he had met U.S. prosecutors - most recently in mid 2011 - but they have so far denied meeting him.

Falciani was coy on the details of many of the investigations underway, including the French one being led by Judge Renaud Van Ruymbeke, who is heading up the French HSBC probe and to whom Falciani has provided evidence.

"The different authorities - whether American, French or European as a whole - have to learn to cooperate," he said. "In the case of HSBC, we already have a case, a judiciary rationale to put together an international team to attack a problem which is global in nature."

Several times during the interview he emphasized the importance of permanent global regulatory solutions rather than punitive ones, adding he felt some sympathy for former U.S. spy agency contractor Edward Snowden, but also sees oversight - at least with regard to banks - as a key government function.

"On the one hand I have intense admiration for how he presents facts that help to unveil the truth and understanding of our world and how it operates; but on the other hand I'd say we need regulation."

(Additional reporting by Pauline Mevel; Editing by David Holmes)

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