Monday, October 21, 2013

Falciani - the Snowden of International Tax Evasion Regime

At the end of 2008, Hervé Falciani committed what is believed to have been the most portentous theft of banking data in history. The systems engineer and former employee at the Geneva offices of HSBC left Switzerland for France and took data from around 130,000 customers at the Anglo-Asian bank along with him. Spiegel
This article is from July 2013. It is full of remarkable information about the dirty side of international tax evasion.
Falciani, 41, has also cooperated with the American authorities. Indeed, on the strength of the information he provided, HBSC was forced to pay a $1.9 billion settlement with the United States after a Senate committee found that failures in HSBC's money-laundering controls had enabled terrorists and drug cartels to gain access to the US financial system.
So the US is fine with using stolen data. 
SPIEGEL: Could you give us a dumbed down description of how money laundering through double accounting works?

Falciani: Let's say a Mexican drug lord has a bank account in Mexico that contains millions from the drug trade. He also has an account in Switzerland with nothing in it. Using its software, the bank sees the account balance in Mexico and grants him a loan in his Swiss account worth the same amount. The money is now laundered and the drug lord can even write off the interest on that debt from his taxes. We need to expose and combat such systems. I would like to get more governments to take part in this.
Nice trick huh. 

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