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.”

News
peopleFrankie Boyle responds to referendum result in characteristically offensive style
Arts and Entertainment
Highs and lows of the cast's careers since 2004
News
news
New Articles
i100... with this review
PROMOTED VIDEO
News
ebooksAn unforgettable anthology of contemporary reportage
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

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Market Risk & Control Manager

Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

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...

Day In a Page

Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
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