INTL Thanks to 'Swiss Leaks' we know how much money rich people are hiding from the world

[Housecarl]

Hummm.....

For links see article source.....
Posted for fair use.....
http://www.globalpost.com/dispatch/news/business/150210/Swiss-Leaks-Project

Timothy McGrath and Simran Khosla February 19, 2015 11:34

Thanks to 'Swiss Leaks' we know how much money rich people are hiding from the world

Analysis: Heard about income inequality lately? Here's one way the rich keep getting richer.

Everybody knows what a “Swiss bank account” is. Hollywood tells us they’re top-secret safety deposit boxes for the world’s elite — places where drug kingpins and bankers and politicians and heirs hide their fortunes from government investigations and taxation. They’re how the super rich do banking.

Now, thanks to one whistleblower and a team of 140 journalists from around the world, we know a lot more about these accounts and the people who hold them.

We know more about how Swiss banking has helped the richest people in the world to accumulate and protect their every growing share of the world's total wealth. We know how banks have helped drug traffickers, arms dealers, and terrorists to launder money and create financial infrastructures that have made them less like criminal gangs operating in dirty cash and more like global criminal enterprises earning interest, making investments, and sending wire transfers. And we know more about how corrupt governments, government officials, and political leaders have embezzled money and robbed the people they're meant to serve.

Here's how we know all this.

In 2009, Hervé Falciani, an IT worker at the British bank HSBC leaked information to French tax investigators that showed HSBC had been stashing clients’ funds in its Swiss subsidiary, HSBC Private Bank. French newspaper Le Monde got ahold of the information in 2014 and set up a collaboration with the the Washington DC-based International Consortium of Investigative Journalists (ICIJ). The new partners recruited a team of investigative journalists from over 45 countries to mine the data, which relates to over 100,000 banking clients in 200 countries, and find the stories.

On Feb. 8, the ICIJ launched its interactive report: “Swiss Leaks.”

(Simran Khosla/ GlobalPost)

“Swiss Leaks” has three main sections: Countries, People, and Stories. Each does something different, and each is deeply troubling in its own way.

Countries

“Countries” gives you the meta-level picture of where the money was coming from — how much money from each country and how many banking clients per country. (You can see that information in graphic form throughout this article.)

Money in Swiss Bank accounts by country

But Swiss Leaks is about much more than just the numbers. It’s about the stories behind them.

People

The “People” section of the report includes profiles of 65 public figures connected to HSBC Swiss accounts. (It’s a sample of the larger data. In its written report, ICIJ discusses many other people.)

You’ll learn, for example, that Mexican billionaire Carlos Hank Rohn was the beneficial owner of 10 bank accounts listed to “Hmex Pte. Ltd” that held a total of around $158 million in 2006/2007.

You’ll also learn that King of Jordan, Abdullah II ibn al-Hussein, was connected to an account opened in the name of a person ICIJ identifies as a “senior palace official.” It held $41.8 billion in 2006/2007.

And there’s plenty more info on arms traffickers, diamond dealers, politicians, sports figures, corporate executives, and celebrities — a pretty diverse crew of people who share one thing in common. They are super rich.

(Simran Khosla/ GlobalPost)

Read “People” carefully, though. Not every person with an HSBC Swiss account is evading taxes and laundering money, as ICIJ notes. Several people responded to ICIJ’s request for comment with compelling explanations.

Take British musician Phil Collins. He’s listed. Bad look, right? Not when you ask Collins’ manager, who explained to ICIJ that the singer actually lives in Switzerland and that “It is entirely appropriate for him to have a bank account where he lives."

Another example: Australian supermodel Elle Macpherson. She’s been the beneficial owner of several client accounts linked to over two dozen bank accounts. In 2006/2007 those accounts held $12.2 million. Tax dodger? Maybe not. “Ms. MacPherson is an Australian citizen,” her lawyers told ICIJ, and she has “accounted for UK tax on the basis of full disclosure in accordance with UK law.”

One lesson from Swiss Leaks is that each HSBC account is a story worth investigating.

Swiss Bank clients by country

Stories

ICIJ’s international team of journalists is telling those stories, and “Stories” is where you can read them.

There are (at least) two things you’ll take away from “Stories.”

First, these reporters have dug deep into a now familiar story about widening global inequality and shown how one part of it works.

Last month, Oxfam reported that the 80 richest people in the world now control as much money as the 3.5 billion poorest people. By 2016, if current trends continue, the richest 1 percent will own more than half of the world’s total wealth. (Currently, they own 48 percent.)

Reporting based on Swiss Leaks data reveals more than just the FACT of massive wealth accumulation by the already massively wealth — it reveals the PROCESS. It’s not inevitable that 80 people in the world should have as much money as the 3.5 billion poorest people. It’s the result of many factors, policies, decisions, and behaviors. Among them is the willingness of banks like HSBC to hide their clients’ money from tax collectors and law enforcement

Second, “Swiss Leaks” reporting suggests that this familiar, global story is really a collection of local stories about greed and graft — about super rich individuals and institutions that maximize their financial gain, minimize tax contributions, and engage in illegal activities ranging from said tax evasion to arms dealing.

That’s why the Israeli newspaper Haaretz reported on the 6,500 Israelis who held $10 billion in HSBC accounts between 1988 and 20007. It’s why the Guardian called attention to HSBC accounts linked to high-profile British politicians and donors. And it’s why the CBC named and shamed Canadian billionaires Frank Giustra, Joseph Kruger II, and Marcel Adams.

The “Swiss Leaks” story and the stories it’s revealed are developing, so follow along. The Swiss government has just opened a criminal investigation against the Geneva-based HSBC for “aggravated money laundering.”

http://www.globalpost.com/dispatch/news/business/150210/Swiss-Leaks-Project

 

[ittybit]

It should be noted that "having an account" with $xxyyzzzillions in it is simply a loan to the bank. The bank plays the money, pays a slight amount of interest and pretends that the account holder has "money in the bank". In reality there is no bundle of cash sitting in the account. It is a liability of the bank to the account holder.

At some point soon, there are going to be a lot of people who have a lot of "money" in accounts, which will basicly be told to go jump off a clif when they demand "their money". It's a game. These poeple are going to lose big time.

 

[NC Susan]

The More You Invest, the More You Can Lose

 

[NC Susan]

http://www.theguardian.com/news/201...gest-leak-banking-history-questions-irs-taxes

US government faces pressure after biggest leak in banking history

Questions for Department of Justice and IRS after disclosure of leak revealing HSBC’s private Swiss bank helped clients to conceal undeclared ‘black’ accounts

• Part 1 The leak
• Part 2 The cash machine
• Part 3 The tax vehicle
• Part 4 The political donors
• Part 5 The unsavoury clients

In 2010, amid growing scrutiny from US tax authorities, HSBC’s private bank in Switzerland stopped doing business with US residents entirely. Photograph: Mike Segar/Guardian Paul Lewis in New York
@PaulLewis

Sunday 8 February 2015


The US government will come under intense pressure this week to explain what action it took after receiving a massive cache of leaked data that revealed how the Swiss banking arm of HSBC, the world’s second-largest bank, helped wealthy customers conceal billions of dollars of assets.
The leaked files, which reveal how HSBC advised some clients on how to circumvent domestic tax authorities, were obtained through an international collaboration of news outlets, including the Guardian, the French daily Le Monde, CBS 60 Minutes and the Washington-based International Consortium of Investigative Journalists.
The files reveal how HSBC’s Swiss private bank colluded with some clients to conceal undeclared “black” accounts from domestic tax authorities across the world and provided services to international criminals and other high-risk individuals.
The disclosure amounts to one of the biggest banking leaks in history, shedding light on some 30,000 accounts holding almost $120bn (£78bn) of assets. Of those, around 2,900 clients were connected to the US, providing the IRS with a trail of evidence of potential American taxpayers who may have been hiding assets in Geneva.

A trail of evidence

The data was leaked by a computer expert turned whistleblower working in HSBC’s Geneva office. French authorities later obtained the files and shared them with the US Internal Revenue Service in 2010. That year, amid growing scrutiny from US tax authorities, HSBC’s private bank in Switzerland stopped doing business with US residents entirely.
HSBC files: why the public should know of Swiss bank’s pattern of misconduct
The US Department of Justice and IRS have been investigating HSBC’s Swiss banking operations ever since but the scale of those inquiries remain unclear.

Confronted by the Guardian’s evidence, HSBC admitted wrongdoing by its Geneva-based subsidiary. “We acknowledge and are accountable for past compliance and control failures,” the bank said in a statement. The Swiss arm, the statement said, had not been fully integrated into HSBC after its purchase in 1999, allowing “significantly lower” standards of compliance and due diligence to persist.

HSBC added: “Beginning in 2008 HSBC began to put a more rigorous control structure in place in the Swiss private bank by, for example, introducing a new policy on US persons and reducing the number of US taxpayer accounts. In 2010, the Swiss private bank decided to exit US resident client business entirely.”
However, the Swiss files, made public for the first time by the Guardian and other media, are likely to raise questions in Washington over whether there is evidence to prosecute HSBC or its executives in the US. Lawmakers are also expected to question the rigour of IRS investigations into undeclared assets hidden by US taxpayers in Geneva.
The IRS said it “remains committed to our priority efforts to stop offshore tax evasion wherever it occurs”, and pointed out it has collected more than $7bn from a program, introduced in 2009, that allows US taxpayers to voluntarily disclose previously undeclared offshore accounts.

However, the IRS declined to say how much it has retrieved in back taxes, interest and penalties as a result of investigations stemming from the leaked HSBC Swiss data. The IRS also declined to say how many US taxpayers have been investigated as a result of the leak, citing taxpayer privacy and the Tax Information Exchange Agreement (TIEA), a treaty that renders secret information shared between the US and France. The DOJ said it “does not confirm or deny the existence of an investigation”.
Senior Senate sources said government officials are likely to be questioned on Capitol Hill over what action was taken after the US received the leaked HSBC data almost five years ago.

Intense scrutiny in DC

On Tuesday, Maryann Hunter, who is on the board of governors of the Federal Reserve and has some responsibility for regulation of foreign banking organisations operating in the US, will give evidence to the Senate banking committee. Two days later, Geoffrey Graber, a deputy associate attorney general at the DOJ who oversees settlements with Wall Street banks, will appear before a House judiciary subcommittee. Both are expected to be questioned about the leak.
Public disclosure of the leaked files comes at a critical moment for HSBC in the US, where prosecutors have already warned the bank is operating under a “sword of Damocles”. HSBC global and its US bank was forced to pay a $1.9bn fine two years ago after the DOJ uncovered evidence HSBC subsidiaries had enabled clients to breach US sanctions against Cuba, Sudan and Iran and, due to oversight failures, allowed Mexican drug cartels to launder billions of dollars.
That deal was unveiled in December 2012, six months after a damning investigation into HSBC global and its US affiliate by the Senate permanent subcommittee for investigations. The deferred prosecution agreement made no mention of evidence of tax evasion connected to HSBC’s Swiss banking division, even though the US government had received the leaked data two years earlier.
Catalogue of malpractice endorsed by bankers laid bare in HSBC files


Swiss operation actively abetted clients in keeping accounts secret from tax authorities, at its height hiding $120bn in assets


The 2012 settlement was overseen by Loretta Lynch, who was then US attorney for the eastern district of New York. Lynch is currently Barack Obama’s current nominee for attorney general.
At the time, the HSBC settlement was heavily criticised by both Republicans and Democrats for allowing the bank to escape criminal indictments and keep the charter which enables it to operate in the US. Lynch and other senior DOJ officials defended the deal, pointing out it committed HSBC to a five-year plan to stamp out money laundering and other illicit practices, an ongoing process that is being overseen by an independent, court-appointed monitor.
Files pertaining to HSBC’s private bank in Switzerland were obtained by a Geneva-based computer technical analyst, Herve Falciani, between 2006 and 2007. The files were later seized by French authorities and have been quietly shared with governments around the world, some of which have mounted investigations into tax evasion.
The HSBC leak has sometimes been referred to as the “Lagarde List”, after the then French finance minister, Christine Largarde, who shared portions of the HSBC data with her counterpart in Greece. The Guardian has reviewed the list of US clients with accounts in HSBC’s private Swiss bank. They include prominent film directors, sports stars, hedge fund managers, retail magnates and major political donors. The HSBC files provide no indication as to whether US clients declared their assets to the IRS.
In a recent court filing, Michael Danilack, a deputy commissioner at the IRS in Washington, said he asked the French for details of US individuals with undisclosed accounts in HSBC’s Swiss bank in early 2010. The request was granted and he received a CD file containing data leaked from HSBC’s Swiss bank “on or about April 6, 2010”, he said.

Prosecuting cases in US

There is evidence that at least some US clients of HSBC’s private Swiss bank have been prosecuted. HSBC was found to have handed over “bricks” of $100,000 a time to US surgeon Andrew Silva in Geneva, so that he could illegally mail cash back to America. He mailed the sum to an address of his home state in Virginia in sums of less than $10,000, to avoid declaring the packages to US customs. He pleaded guilty to criminal tax evasion in 2010.
Another US client, Sanjay Sethi, pleaded guilty in 2013 to cheating the US tax authorities by maintaining $4.7m in accounts in Switzerland and India. The prosecution in his case said a high-ranking HSBC executive based in London promised a Swiss undeclared account would allow his assets “to grow tax-free and bank secrecy laws in Switzerland would allow Sethi to conceal the existence of the account”.

Last year, there were additional US court cases, in New York and Virginia, to enforce IRS summonses for records of undeclared HSBC Swiss accounts held by two US taxpayers.
It is not known how many other investigations have been brought against US taxpayers over undeclared assets in HSBC’s Swiss bank, or whether the DOJ is considering prosecuting the bank or its executives. Almost five years after the data leaked by Falciani was passed onto US authorities, the investigations into HSBC’s private Swiss bank appear to be ongoing.

Obama will propose mandatory tax on US companies' earnings held overseas

HSBC’s most recent annual report, published last year, said the bank was under investigation in the US by the DOJ and IRS “regarding whether certain HSBC companies and employees acted appropriately in relation to certain customers who had US tax reporting requirement”. It added: “In connection with these investigations, HSBC Private Bank Suisse SA, with due regard for Swiss law, has produced records and other documents to the DoJ and is cooperating with the investigation.”
HSBC also said in the report that the DoJ had requested additional information from HSBC’s Swiss bank “regarding the transfer of assets to and from US persons related accounts and employees who serviced those accounts”. The report disclosed the fact that the DOJ informed HSBC’s Swiss bank, in August 2013, that it was not eligible for the non-prosecution agreements made available to other Geneva-based banks.
It also warned HSBC shareholders there was a “high degree of uncertainty” over the ongoing US investigations and it was possible the bank could be forced to pay “significant” fines and penalties.
The DOJ was under pressure to go beyond financial penalties – to bring criminal charges against HSBC or its bankers – in July 2012, after the Senate’s permanent subcommittee on investigations published its crushing 330-page report documenting how the bank’s lax anti-money laundering controls had been exploited by drug traffickers.
HSBC’s head of compliance, David Bagley, resigned before the committee during a gruelling cross-examination from senators. Six months later, in December 2012, HSBC negotiated the settlement with the DOJ in which it agreed to pay almost $2bn and commit to a five-year plan to stamp out illicit practices, overseen by the independent monitor.
The settlement proved controversial because it stopped short of criminally indicting the bank or its executives; lawmakers from both parties complained it revealed some Wall Street institutions were considered “too big to jail”.

HSBC deal ‘fundamentally wrong’

The Democratic senator from Massachusetts Elizabeth Warren famously labelled the HSBC deal “fundamentally wrong”. “HSBC paid a fine, but no individual went to trial, no individual was banned from banking and there was no hearing to consider shutting down HSBC’s actives in the US,” Warren said at a Senate committee hearing in 2013. “How many billions of dollars do you have to launder for drug lords and how many sanctions do you have to violate before someone will consider shutting down a financial institution like this?”
At the time of the HSBC settlement, Lanny Breuer, then the head of the DOJ’s criminal division, insisted the bank was not being let off the hook. “It’s the first time in history that a foreign institution is going to have a monitor,” Breuer said. “There’s a sword of Damocles right now over HSBC.” Lynch told CBS News at the time that she expected HSBC to “literally turn their company inside out” as part of the agreement.
Lynch was pressed over the HSBC settlement by Democratic senator Richard Blumenthal last week, during a confirmation hearing by the judiciary committee. Obama’s candidate for attorney general did not comment on the specifics of the deal, but told senators she was committed to “aggressively” pursuing white collar crime. “No individual is ‘too big to jail’,” she said. “And no one is above the law.”

HSBC is now just over two years into its reform plan, and has been deemed to be complying with the terms of the settlement. However, the court-appointed monitor, Michael Cherkasky, who oversees a team of banking investigators who review HSBC’s changes, has expressed some concern over the pace of reform. Cherkasky’s most recent assessment of HSBC’s ongoing efforts to clean up its act has once again concluded it could do better, according a recent report in the Wall Street Journal which cited people familiar with its findings.
Meanwhile, HSBC remains entangled with US law enforcement and regulators on other fronts. In November, the bank reached with the the Securities and Exchange Commission in which HSBC agreed to pay $12.5m to resolve charges that its Swiss private banking division illegally provided investment and brokerage services to US clients.
The following month, the IRS issued a court summons to HSBC USA to “produce information about US taxpayers who may be evading or have evaded federal taxes” using a company called Sovereign Management & Legal Ltd, which trades via the website named offshore-protection.com. Prosecutors believe the US correspondent bank accounts that HSBC USA holds for Sovereign’s banks in Panama and Hong Kong are likely to have records of financial transactions by US clients who may have evaded taxes.

In May last year, the DOJ revealed it was prepared to bring criminal charges against banks suspected of involvement in tax evasion, when it forced Credit Suisse to plead guilty to a major conspiracy to aid US taxpayers filing false returns to the IRS. Under a plea agreement, Credit Suisse paid a total of $2.6bn.
“This case shows that no financial institution, no matter its size or global reach, is above the law,” the US attorney general, Eric Holder, said at the time. “Credit Suisse conspired to help US citizens hide assets in offshore accounts in order to evade paying taxes. When a bank engages in misconduct this brazen, it should expect that the Justice Department will pursue criminal prosecution to the fullest extent possible, as has happened here.”

 

[Dozdoats]

Obama will propose mandatory tax on US companies' earnings held overseas

So ... how much is in 0's secret bank accounts? And where is the accounting for the money?

 

[Knoxville's Joker]

Obama will propose mandatory tax on US companies' earnings held overseas

So ... how much is in 0's secret bank accounts? And where is the accounting for the money?

Unfortunately that can backfire as such folks are highly mobile and would renounce any and all ties to the United States, causing even greater cuts in tax revenues. Though sanity and reality seem to be foreign concepts to that person.