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Documents Identify the Level of Tax Evasion at HSBC Bank

Offshore Account Update, UBS / HSBC

Posted on May 8, 2015 |

HSBC has been in trouble with the U.S. government in the past for the unlawful behavior of its private bank. In 2012, HSBC was fined for its role in facilitating money laundering.  Yahoo is now reporting on leaked documents from HSBC showing how involved the bank was not just in money laundering but also in helping people worldwide evade their income tax obligations.

Information on HSBC’s offshore accountholders was provided by a whistleblower. As taxing authorities worldwide get confirmation about the global scale of tax evasion efforts, this is likely to prompt additional aggressive investigation of banks and bankers.  Stepped up investigation efforts could, in turn, prompt more whistleblowers to come forward to protect themselves from facing criminal charges.

Investors are the ones who could be harmed by this, as authorities are provided with information on offshore accounts and come after individuals for evading their tax obligations. If you have money offshore and are concerned about whether you have complied with all IRS rules, you need to act before the IRS investigates you.

HSBC Document Leak Reveals Billions in Offshore Accounts

Documents from HSBC provide details on accounts dating up through 2007. A whistleblower provided the documents to French authorities who shared the information with other governments worldwide. 

The documents revealed details about more than 100,000 different accountholders and legal entities, including arms dealers, drug traffickers, celebrities and other wealthy people who were evading their tax obligations. Individuals and legal entities from more than 200 different countries had account information contained in the leaked documents and together their accounts were valued at more than $100 billion.

Although this is a huge amount of money, it is only a small part of the total wealth that authorities believe is held in offshore accounts.  Most experts estimate that accountholders have more than $7.6 trillion of wealth in offshore accounts, much of it in countries like Switzerland that have a long tradition of secrecy in banking.  The estimated global loss of revenue to governments worldwide from all of these offshore accounts is around $200 billion.

Authorities have been trying to put a stop to this. France launched 103 actions based on information about people using HSBC’s private bank for tax evasion and Britain recovered around 125 million Pounds, or $236 million, from tax evaders.  Some believe that the governments should be even more aggressive in pursuing lost revenue and take criminal action.

Document leaks like the one from HSBC are invaluable to the Department of Justice and other authorities who want to find hidden offshore funds. When banks are investigated for suspected wrongdoing, it is also common for the institutions to turn over information on accountholders in exchange for reduced penalties. 

Investors need to be aware that their private offshore accounts are going to be very difficult to keep secret in this current global effort to fight tax evasion.  If you have offshore accounts, you should talk to Boston tax evasion lawyer Kevin Thorn about your legal options as soon as possible.

For a consultation, contact Kevin E. Thorn, Managing Partner, at ket@thornlawgroup.com or (617) 692-2989

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