Black Money

The Biggest Leak In Black Money Probe – HSBC Swiss Leaks – Real Reason Why HSBC Shut In India

Black money refers to funds earned on the  black market, on which income and other taxes has not been paid.

Hervé Falciani, was convicted to five years in prison for what is termed as the biggest leak in banking history- the Swiss Leaks.

In 2008, the Franco-Italian systems engineer and whistle blower began collaborating  with numerous European nations by providing allegedly illegal stolen information relating to more than 130,000 suspected tax evaders with Swiss bank accounts – specifically those with accounts in HSBC’s Swiss subsidiary HSBC Private Bank.

On 11 December 2014, Falciani was indicted by the Swiss federal government for violating the country’s fabled bank secrecy laws and for industrial espionage.

The indictment accused Falciani (who was not named) of stealing information from HSBC’s Geneva offices and passing it on to tax authorities in France.

HSBC had been indicted in France for money laundering in November 2014.

He did not attend the trial and remains at large in his native France, where he can avoid arrest because France doesn’t extradite its own citizens.

Falciani began copying the records to his personal computer in 2006, and later fled when he was confronted by his employer.

In a interview with CBC News in Nice, France, he said he was driven by profound qualms about the secrecy of the Swiss banking industry and how it enabled wealthy people around the world to shield money from tax authorities.

“I came to the point that something was very wrong and should be changed,” he said. “A huge industry is made just to go around rules that we can’t go around as simple citizens.”

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The “Edward Snowden of Tax evasion” became famous for the “Lagarde List”, wherein he gave the information  containing roughly 2,000 potential tax evaders with undeclared accounts at Swiss HSBC bank’s Geneva branch.

The Lagarde list is only a subset of a much larger data set, known as the Falciani list, with around 130,000 names of HSBC customers captured by the French police.

The Swiss leaks have been key to to India’s black money probe. Earlier this month, he said he was willing to “cooperate” with the Indian investigative agencies in their black money probe but would need “protection”.

About the sentencing, Falciani told NDTV that nothing has changed and it should not affect his collaboration with Indian authorities.

Meanwhile, HSBC on Friday announced shutting down of its private banking business in India that offers wealth management services. The bank’s private banking division has been mired in the black money probe after it was revealed during investigation by global journalists’ collective ICIJ that more than 1,000 Indians had parked $4.1 billion in HSBC Geneva till 2007.

Even though Falciani has said that nothing has changed and the sentence will not affect his collaboration with Indian authorities, it has cast a serious doubt on the Black Money probe in India as he seemed to be the only guy the Government did bank upon.

However, Switzerland has agreed to cooperate if India is able to provide some additional evidence even in cases of names collected through “stolen data”.