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TAX FRAUD

Spain rejects extraditing ‘Swiss Leaks’ whistelblower, Herve Falciani

A Spanish court ruled Tuesday against extraditing Herve Falciani, a former HSBC analyst who leaked documents alleging widespread tax evasion, to Switzerland.

Spain rejects extraditing 'Swiss Leaks' whistelblower, Herve Falciani
Photo: AFP

The National Court said in a statement that it had already rejected his extradition in a previous case in 2013, adding there is no equivalent in Spanish law of the crime of “aggravated financial espionage” for which he was convicted in Switzerland.

The court argued that the crime “differs substantially with the Spanish offences that can be considered most similar, like 'disclosure' of secrets'.”   

Falciani was arrested in Madrid in April on his way to a conference on the need to protect whistleblowers and released on bail.   

READ MORE. HSBC 'whistleblower' Falciani arrested in Spain on Swiss warrant

He had been convicted in absentia of financial espionage in Switzerland in 2015 for the scandal that became known as “Swiss Leaks”.   

A Swiss court handed him a five-year jail sentence but the 46-year-old has avoided Switzerland since.

The Franco-Italian national worked for the Swiss branch of HSBC and became known as the “the man who terrifies the rich” after leaking information in 2008 that alleged HSBC's Swiss private banking arm helped 79,000 clients evade billions of euros in taxes.

Falciani became an IT worker for HSBC in 2000 and moved to the bank's offices in Geneva in 2006.

There, he obtained access to encrypted customer information.   

In 2008, he went to Lebanon with the information planning to sell the data, without success. Swiss authorities described it as “cashing in”.   

He then came back to Switzerland where he was under investigation and ended up leaving for France, where he passed on the pilfered information to tax authorities.

This led to the prosecution of tax evaders including Arlette Ricci, heir to France's Nina Ricci perfume empire, and the pursuit of Emilio Botin, the late chairman of the Spanish bank Santander.

Since then, he has become known as the “Snowden of tax evasion,” in reference to former intelligence contractor Edward Snowden, who in 2013 revealed the scope of the US government's electronic surveillance programme.   

Falciani had already been arrested in Barcelona in July 2012 on an international warrant issued by Switzerland.   

He then spent several months in a Spanish prison.   

But in 2013, the National Court ended up refusing his extradition on the grounds that the charges he faced in Switzerland are not considered crimes under Spanish law.

TAX FRAUD

Denmark hits German bank with multi-million euro fine over tax fraud

Denmark slapped a German bank with a fine of 110 million Danish kroner (14.7 million euros) on Monday in a case which is part of the biggest fraud scandal the Scandinavian country has seen.

Denmark hits German bank with multi-million euro fine over tax fraud
Denmark's Tax Authority (Skattestyrelsen) in Copenhagen. Photo: Niels Christian Vilmann/Ritzau Scanpix

The case relates to the European “cum-ex” tax scam. 

North Channel Bank was found guilty of facilitating “1.1 billion kroner (that) was unjustifiably paid out from the Danish treasury,” according to a statement by the Danish Prosecution Service.

The German bank admitted its role in the fraud case and accepted the fine at the district court in the Copenhagen suburb of Glostrup, the statement continued.

The case is part of a wider affair in which Denmark is estimated to have lost 1.7 billion euros to fraudulent tax return claims.

First revealed in Denmark in 2015, it is considered the largest case of tax fraud in the history of the country, which is now revising its tax code.

The scam centred around companies, funds or individuals using a system of exchanging stocks in companies to claim multiple tax rebates for a single dividend payout.

The so-called “CumEx-Files”, an investigation published last October by big-name European outlets including German public broadcaster ARD and French newspaper Le Monde, showed that the practice was also used around Europe, costing Germany 7.2 billion euros and Belgium 201 million euros since 2001.

Danish prosecutors said the crime was committed when a number of actors made several fictitious stock trades to create “a paper trail,” and that the bank played a “crucial role” in its creation.

Capital gains made on the Danish stock market are normally taxed at 27 percent, but treaties between Denmark and certain countries allow beneficiaries based in these countries to be refunded all or part of this tax.

“It's very satisfying that we now have the first conviction in a court in the dividend cases,” prosecutor Kirsten Dyrman, said in a statement.

“All together this is the biggest fraud case in the history of Denmark, and has resulted (in) a significant loss for society and the treasury,” she added.

In March, Danish tax authorities reported that they had taken legal action against 470 individuals and companies related to the affair.

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