HSBC, the British-based banking giant, has become ensnared in a US tax evasion investigation, after employees were accused of helping one of its American clients hide money offshore.
Federal authorities are considering serving a broad legal summons on HSBC, to examine if its bankers sold tax evasion services to dozens or hundreds of its clients, it has emerged.
The moves come nearly two years after the Zurich-based bank UBS agreed to pay $780m to the US government and revealed the details of 4,000 US clients' Swiss bank accounts after admitting it helped those who wanted to evade US taxes. The deal, under which UBS avoided criminal charges, blew a hole in Switzerland's traditional banking secrecy, and encouraged 18,000 US residents to reveal their offshore accounts in an amnesty offered by the Internal Revenue Service.
This week, the IRS said it will soon offer a second amnesty, under which it will not prosecute Americans who reveal their offshore accounts, as long as they pay back taxes owed. HSBC said last night that it complies with the law in all the jurisdictions in which it operates, but declined to comment on any potential investigation, or on whether it has disciplined bankers involved in the case filed this week. The bank pointed out that it was not a party to the case, and was not even named in the indictment.
"HSBC does not condone tax evasion and fully supports the US efforts to promote appropriate payment of taxes by US taxpayers," a spokesman said. "As per policy, we investigate all allegations of employee misconduct vigorously and take appropriate action if breaches to HSBC policies are found."
On Wednesday, prosecutors in New Jersey filed charges against Vaibhav Dahake which said that the businessman conspired with bankers of "one of the largest international banks in the world" to hide accounts in India. The indictment refers to five unnamed bankers who conspired with Mr Dahake: two in New York, one in Fremont, California, and two in Thane, India. It is alleged that HSBC suggested Mr Dahake open accounts in India to add to those he already held in the British Virgin Islands, and that it helped him shuffle money out of the sight of the US tax authorities.Reuse content