HSBC feels heat from regulator over 'criminal' accounts in its Jersey banks

List of account holders gives to HMRC includes known international criminals

Financial watchdogs have demanded explanations from HSBC after it emerged that the bank is at the centre of an HM Revenue & Customs investigation over offshore accounts opened in Jersey, including some for criminals living in Britain.

The Financial Services Authority (FSA) is understood to have asked to be kept informed of what could be the second major scandal to hit a bank in a matter of months.

HSBC is already preparing to pay $1.5bn of fines to American authorities after subsidiaries funnelled money for drug runners and Iran through the bank in breach of money-laundering laws.

The bank has admitted that it could face prosecution and that the final payment could be even higher.

According to the Daily Telegraph, the tax authorities have obtained details of “every British client of HSBC in Jersey” based on information provided by a whistleblower. It is reported that the 4,000 offshore account holders include a man once called London’s “number two crook”, a well-known drug dealer living in Central America and bankers facing fraud allegations.

The FSA last night said it could not comment on the claims, but The Independent understands that if there is any link found to the bank’s British operations a full investigation could be launched within days.

The Jersey Financial Services Commission also warned: “Any concerns regarding the use of the banking system in Jersey involving money of criminal origin... will be robustly investigated.” But it did not refer to HSBC by name.

While most of the accounts are likely to be lawful, regulators on both sides of the Atlantic have been increasingly cracking down on banks seen as having weak controls on the issue of money laundering. Were HSBC or any other bank found to have failed in this regard, they could face a severe penalty.

Investigations by The Independent have revealed that HSBC has three separately run banks on the island. The first is a retail bank dealing with the day-to-day banking needs of Jersey’s citizens. The second is HSBC International, which looks after ex-pat Britons. The third is HSBC Private Bank Jersey.

It is not yet clear from where the list of HSBC clients hails, but it could involve either one or both of the second two banks. A former member of staff said there were “skeletons in the closet” dating from before the financial crisis. “We would check up on the names of people who wanted to open accounts and demand explanations for where any large sum of money came from. But there were definitely skeletons in the closet,” they said.

The HSBC leak identifies 4,398 people holding £699m in offshore accounts, with potentially billions more held in investment schemes. The Independent’s source said the main area for the “skeletons” referred to was in the bank’s investment arm.

HM Revenue & Customs said of the HSBC data: “We can confirm we have received the data and we are studying it. We receive information from a very wide range of sources which we use to ensure the tax rules are being respected. Where we uncover evidence of tax evasion we will crack down on it.”

HSBC said in a statement: “We are investigating the reports of an alleged loss of certain client data in Jersey as a matter of urgency. We have not been notified of any investigation in relation to this matter by HMRC or any other authority but, should we receive notification, we will cooperate fully with the authorities.”

Sport
The sun rises over St Andrews golf course, but will it be a new dawn for the Royal and Ancient Golf Club?
sportAnd it's Yes to women (at the R&A)
Arts and Entertainment
Friends is celebrating its 20th anniversary this year
tvSeries celebrates 20th anniversary
Sport
Yaya Touré (left) and Bayern Munich’s Spanish defender Juan Bernat
footballToure's lack of defensive work is big problem for City
Voices
voicesApple continually kill off smaller app developers, and that's no good for anyone
PROMOTED VIDEO
Arts and Entertainment
Liam Neeson said he wouldn't
tv

Liam Neeson's Downton dreams

Sport
Wembley Stadium
footballNews follows deal with Germany
Arts and Entertainment
A spell in the sun: Emma Stone and Colin Firth star in ‘Magic in the Moonlight’
filmReview: Magic In The Moonlight
News
ebooksAn unforgettable anthology of contemporary reportage
Sport
A 'Sir Alex Feguson' tattoo
football

Arts and Entertainment
Ben Whishaw is replacing Colin Firth as the voice of Paddington Bear
tv

Thriller is set in the secret world of British espionage

Life and Style
life

News
ScienceGallery: Otherwise known as 'the best damn photos of space you'll see till 2015'
Life and Style
fashion

Bomber jacket worn by Mary Berry sells out within an hour

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Audit Manager Central Functions

To £85,000 + banking benefits: Saxton Leigh: You will be expected to carry out...

Credit Risk Audit Manager

Up to £90,000 + benefits: Saxton Leigh: Credit Risk Audit Manager required to ...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week