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Spain opposes return of Swiss bank data thief

A Spanish prosecutor on Monday opposed the extradition of a former HSBC employee to Switzerland, where he is wanted for stealing banking data that exposed thousands of suspected tax dodgers.

Spain opposes return of Swiss bank data thief
Hervé Falciani, former employee of HSBC Private Bank in Geneva, attends court hearing near Madrid on Monday. Photo: Juan Carlos Hidalgo/Pool/AFP

Swiss authorities want Hervé Falciani, a French-Italian citizen arrested in Barcelona in July 2012 and then granted conditional release, sent back to Switzerland to face charges of breaching banking secrecy.
   
But during his extradition hearing Spanish prosecutor Dolores Delgado 
opposed the request on the grounds that the former computer engineer at the banking giant in Geneva was helping authorities investigate tax fraud.
   
"Falciani has cooperated with the authorities of various countries, 
starting with France, then Italy, the United states, and now Spain is benefiting from this cooperation," she told the Madrid court hearing the case.
 
"We can't punish people who, when they observe criminal conduct where they 
work, denounce it to the authorities," she said, adding that the total fraud unveiled amounted to 200 billion euros ($260 billion).
   
Falciani, who wore a grey suit and black tie, told the court he had received 
no remuneration for providing the data to France and other governments.
   
"Never, in no instance," the whistleblower said when asked if he had 
received any money for turning over the files — data linked to at least 24,000 customers of the bank's  Geneva subsidiary — to the French authorities.
   
The files, which were subsequently relayed by French investigators to their 
counterparts in the United States, Spain, Italy and several other European Union countries, led to a raft of prosecutions.
   
He told the court he obtained the files from colleagues and said the 
information was so abundant that "if printed, it would fill an entire freight train."
   
Falciani said he informed Swiss authorities in 2008 but they refused to let 
him make an anonymous complaint.

He said he then sent the files to French authorities.

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BUSINESS

HSBC to pay France €300million to avoid tax fraud trial

HSBC Private Bank, a Swiss unit of banking giant HSBC, has agreed to pay 300 million euros ($352 million) to avoid going to trial in France for enabling tax fraud, prosecutors said Tuesday.

HSBC to pay France €300million to avoid tax fraud trial
Photo: AFP

HSBC was accused last year of helping French clients to hide at least 1.67 billion euros from the tax authorities, according to a source close to the probe.

The deal struck between the financial crime prosecutor's office and the bank is a first in France under a new procedure that allows companies under
suspicion of corruption or dissimulation of tax fraud to negotiate a fine to stop a case from going to trial.

The deal does not include a guilty plea.

French prosecutors have now dropped the case against HSBC Holdings.

The case against HSBC was opened back in 2015 and was over an alleged global tax-dodging scheme that helped hundreds of French nationals and pothers around the world evade the tax man.

Investigators believe that HSBC's private banking division offered its customers several ways of hiding assets from the French taxman, notably via the use of offshore tax havens.

The banking giant was at first accused of failing in its supervisory role over its private banking division, but further investigation led to suspicions
that HSBC “participated actively in the fraudulent practices”, the source close to the investigation said.

The probe named the former chief executive of the bank's Swiss private banking arm, Peter Braunwalder, and another executive, Judah Elmaleh.

The case began when French authorities in late 2008 received files stolen by Herve Falciani, a former HSBC employee, whose disclosures sparked the so-called “Swissleaks” scandal on bank-supported tax evasion.

The French-Italian national — dubbed by some media as “The Edward Snowden of banking” — leaked a cache of documents allegedly indicating that HSBC helped more than 120,000 clients of a number of nationalities to hide 180.6 billion euros from tax authorities between November 2006 and March 2007.

He was sentenced in absentia in November in Switzerland to five years in prison. The leaked files led to investigations by tax authorities in several European countries including, in addition to France, Spain and Belgium.