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It is the Hervé Falciani leak. See the Guardian coverage: http://www.theguardian.com/business/2015/feb/08/hsbc-files-expose-swiss-bank-clients-dodge-taxes-hide-

by junto 12y ago

It is the Hervé Falciani leak. See the Guardian coverage: http://www.theguardian.com/business/2015/feb/08/hsbc-files-expose-swiss-bank-clients-dodge-taxes-hide-millions http://www.theguardian.com/business/2015/feb/08/hsbc-files-e... The origin of the leak The HSBC files were obtained through an international collaboration of news outlets, including the Guardian, Le Monde, BBC Panorama and the International Consortium of Investigative Journalists 1 In late 2007, Hervé Falciani, an IT expert at HSBC's Swiss bank, hacked into its customer files. He fled to France with police on his trail for breaching Switzerland's rigid bank secrecy laws. 2 The French authorities detained him, but refused to extradite him when they realised the data could identify thousands of French tax evaders. Falciani now lives in France under protection. 3 In early 2010, under finance minister Christine Lagarde, France prepared confidential lists of the leaked names for other countries. The so-called "Lagarde list" led to scandal and arrests in Greece, Spain, the US, Belgium and Argentina. 4 Britain's tax authority, HMRC, received a list in 2010 from which it identified more than 1,000 tax evaders. More than £135m ($206m) was quietly recovered in repayments, but only one person was prosecuted. There has been no UK legal action against HSBC. Names were never revealed.

tormeh 12y ago
Why so few prosecuted in Britain? Wouldn't this be a good opportunity to get some assholes who thought they could shift the tax burden to others? Six month prison sentences sounds reasonable. British prisons suck, but given that this is partly the dodgers fault that's just poetic.
- swombat 12y ago
  As I recall, to get prosecuted for tax evasion in the UK, you need to not only commit the tax evasion, but also to lie to the HMRC investigation of the tax evasion, at the point where they ask you to sign a form that explicitly says that if you lie now and they find out, they will put you in jail. So unless you lie at that point, you will not be prosecuted, only investigated. This may let some tax dodgers off the hook, but it also ensures that genuine mistakes are not punished by jail time.
  - tormeh 12y ago
    Protecting people from their own mistakes is fine, but they lost that defence once they put the money in secret swiss bank accounts. Secret. Swiss. Bank. Accounts. Might as well accidentally ask the local mafia to white wash some money while they twirl their mustaches.
    - vertex-four 12y ago
      Once you get into dealing with large amounts of money across the world, there's a lot of things that seem like they should be illegal that aren't. While this case is probably rather clear-cut, most cases are not. The Government doesn't actually want to put people in jail (what problem would that solve?), unlike the US Government - it just wants its money. The law seems reasonable to get that.
    - vidarh 12y ago
      The problem is that there's nothing illegal about putting your money in secret swiss bank accounts per se. It first becomes tax evasion (in the UK anyway; details may vary) the moment you fail to report income or capital gains that are taxable, since the UK does not tax wealth.
      - tormeh 12y ago
        Yeah, but you don't accidentally both place your money in secret Swiss bank accounts and fail to report it. You may want a secret account for privacy and you may forget to report all your money. Doing both at once, however, is highly unlikely. There's an end to plausible deniability and beyond that end should lie prison time.
        vidarh 12y ago
        It may be unlikely, but not so unlikely that I think you'd manage to convince many to put someone in prison for it without additional evidence. Expect lengthy trials with all kinds of details showing up that creates sufficient doubt to make it hard to justify a prison sentence. For starters, unless HMRC can prove that you have received the money in a way that should be taxed in the UK, they have no reason to expect you to report the money, and so most people don't. E.g. for my part I'm Norwegian, but have been ordinarily resident in the UK for the last 13 years or so. The first year I lived here, I was not ordinarily resident for tax purposes, and maintained accounts in Norway that HMRC had no expectation of knowing anything about, and no legal basis for me to report. But if I had had a large enough fortune and income, it'd have been trivial for me to maintain a status as not ordinarily resident much longer, and legally avoid reporting any income due from work done outside the UK at that point. The same is possible for UK citizens who move out of the UK to work for some time. For me there was no point, since all my income came from the UK, and so I brought my money into the UK once I'd tidied up my Norwegian affairs. If you wish to defraud the HMRC, then, and create plausible deniability, you move out of the UK, or at least spend enough time outside the UK for a few years to be able to claim that when you receive that X million payment from WeAreTaxEvaders Ltd. in the Cayman Islands, directly to your secret account in Switzerland, it is income due to you entirely from work done outside the UK in a period where you were not resident in the UK for income tax purposes. Then you move back, and conveniently don't tell the HMRC because, you will claim, it has nothing at all to do with them (of course it is not at all because you don't want to risk that they take a closer look at the paper trails related to WeAreTaxEvaders Ltd. and maybe find traces of payments from the UK etc., or a timeline that doesn't match when you were abroad), and you way have had legitimate reasons to want to e.g. invest in Swiss shares or whatever at a later date when you retire to a cabin in the Swiss alps. Or whatever. If you are telling the truth about this, it is none of the HMRC's business that the money is sitting there unreported. This is the problem with going after these schemes: There are any number of completely legal - for good reason, often, - mechanisms that allow the unscrupulous to create sufficient plausible deniability that actually proving a case becomes incredibly hard. It's easy to sit and assume that of course these are tax evaders. Except some non-trivial percentage of them are not. HMRC risks not only not getting the actual tax evaders imprisoned, but not getting their hands on the money either, if they go to court on insufficient evidence. Going after just the money is a lot easier since people are often willing to pay to make the threat of further investigation go away even if they see the risk of prison as remote.
- easytiger 12y ago
  Or how about you let the authorities deal with it in a reasonable, case by case basis and get off your polemic high horse
  - mercurial 12y ago
    Is it "polemic" now to expect that people pay taxes, and get punished when they try to cheat their way out of it?
    - chrisbennet 12y ago
      Apparently "Only the little people pay taxes." or go to jail. http://en.m.wikipedia.org/wiki/Leona_Helmsley http://en.m.wikipedia.org/wiki/Leona_Helmsley
    - easytiger 12y ago
      People do pay taxes. Very few don't. This kind of diatribe just gives governments mindshare to promote even more aggressive and punitive taxes.
      - mercurial 12y ago
        You mean that the people who got the most out of the system shouldn't be expected to contribute back the most?
        easytiger 12y ago
        I knew you were going to say that.
        vixen99 12y ago
        Most out of the system? In what way could this possibly be true? 100 billion is 1/6th of UK government expenditure in a year. Moreover that money was generated by these people not money creamed off the UK taxpayers. Simple arithmetic tells us that the people who get the most out of the system are the ordinary UK citizens who use government services .
- hessenwolf 12y ago
  What would be the value in it? Justice? What does that mean? Punishment? Or to send a warning? Would that really be effective? What would be the cost? Was there anybody in the pot that was expendable, economically?
  - crdoconnor 12y ago
    >Or to send a warning? Would that really be effective? Yes. A lot of tax evaders who wouldn't even blink at a potential $500k fine would not take any risks if the were faced with real jail time. That means more tax revenue.
  - mercurial 12y ago
    > Was there anybody in the pot that was expendable, economically? What do you mean by "economically expendable"?
    - tormeh 12y ago
      https://www.google.no/search?channel=fs&q=too+rich+for+prison&ie=utf-8&oe=utf-8&gfe_rd=cr&ei=BJnYVO2qEIGA8Qey8oGwDw https://www.google.no/search?channel=fs&q=too+rich+for+priso...
  - chrisbennet 12y ago
    What does "expendable, economically" mean?
    - tormeh 12y ago
      https://www.google.no/search?channel=fs&q=too+rich+for+prison&ie=utf-8&oe=utf-8&gfe_rd=cr&ei=BJnYVO2qEIGA8Qey8oGwDw https://www.google.no/search?channel=fs&q=too+rich+for+priso...
- toyg 12y ago
  > Wouldn't this be a good opportunity to get some assholes It would, if there was an actual will to "get some assholes" in the first place. As reported by Private Eye several years ago, as soon as the current government got into power, several outstanding (and huge) tax-dodging cases were quietly settled, largely in favour of such dodgers. Once called on it, they reshuffled a couple of appointees and said it wouldn't happen again. I wouldn't be surprised to find the new bosses were told to put this list in the wrong drawer and accidentally forget about it entirely. The previous government would have probably used the list for a fundraising round - if you can sell peerages, you might as well sell pardons. The next government will likely replace a few appointees here and there, and if pressed they will claim cases are too old to be efficiently investigated, it was all the previous guys' fault, etc etc.
- raquo 12y ago
  I don't know the situation, but I wouldn't be surprised if there were too many important people on that list. Prosecuting the whole elite is not something that the elite typically does.
- drapper 12y ago
  House of Commons will be all about that today http://www.theguardian.com/news/live/2015/feb/09/hsbc-files-global-reaction#block-54d8aa2ee4b083959b485b24 http://www.theguardian.com/news/live/2015/feb/09/hsbc-files-...

by junto 12y ago

tormeh 12y ago

Why so few prosecuted in Britain? Wouldn't this be a good opportunity to get some assholes who thought they could shift the tax burden to others? Six month prison sentences sounds reasonable. British prisons suck, but given that this is partly the dodgers fault that's just poetic.

swombat 12y ago
As I recall, to get prosecuted for tax evasion in the UK, you need to not only commit the tax evasion, but also to lie to the HMRC investigation of the tax evasion, at the point where they ask you to sign a form that explicitly says that if you lie now and they find out, they will put you in jail. So unless you lie at that point, you will not be prosecuted, only investigated. This may let some tax dodgers off the hook, but it also ensures that genuine mistakes are not punished by jail time.
- tormeh 12y ago
  Protecting people from their own mistakes is fine, but they lost that defence once they put the money in secret swiss bank accounts. Secret. Swiss. Bank. Accounts. Might as well accidentally ask the local mafia to white wash some money while they twirl their mustaches.
  - vertex-four 12y ago
    Once you get into dealing with large amounts of money across the world, there's a lot of things that seem like they should be illegal that aren't. While this case is probably rather clear-cut, most cases are not. The Government doesn't actually want to put people in jail (what problem would that solve?), unlike the US Government - it just wants its money. The law seems reasonable to get that.
  - vidarh 12y ago
    The problem is that there's nothing illegal about putting your money in secret swiss bank accounts per se. It first becomes tax evasion (in the UK anyway; details may vary) the moment you fail to report income or capital gains that are taxable, since the UK does not tax wealth.
    - tormeh 12y ago
      Yeah, but you don't accidentally both place your money in secret Swiss bank accounts and fail to report it. You may want a secret account for privacy and you may forget to report all your money. Doing both at once, however, is highly unlikely. There's an end to plausible deniability and beyond that end should lie prison time.
      - vidarh 12y ago
        It may be unlikely, but not so unlikely that I think you'd manage to convince many to put someone in prison for it without additional evidence. Expect lengthy trials with all kinds of details showing up that creates sufficient doubt to make it hard to justify a prison sentence. For starters, unless HMRC can prove that you have received the money in a way that should be taxed in the UK, they have no reason to expect you to report the money, and so most people don't. E.g. for my part I'm Norwegian, but have been ordinarily resident in the UK for the last 13 years or so. The first year I lived here, I was not ordinarily resident for tax purposes, and maintained accounts in Norway that HMRC had no expectation of knowing anything about, and no legal basis for me to report. But if I had had a large enough fortune and income, it'd have been trivial for me to maintain a status as not ordinarily resident much longer, and legally avoid reporting any income due from work done outside the UK at that point. The same is possible for UK citizens who move out of the UK to work for some time. For me there was no point, since all my income came from the UK, and so I brought my money into the UK once I'd tidied up my Norwegian affairs. If you wish to defraud the HMRC, then, and create plausible deniability, you move out of the UK, or at least spend enough time outside the UK for a few years to be able to claim that when you receive that X million payment from WeAreTaxEvaders Ltd. in the Cayman Islands, directly to your secret account in Switzerland, it is income due to you entirely from work done outside the UK in a period where you were not resident in the UK for income tax purposes. Then you move back, and conveniently don't tell the HMRC because, you will claim, it has nothing at all to do with them (of course it is not at all because you don't want to risk that they take a closer look at the paper trails related to WeAreTaxEvaders Ltd. and maybe find traces of payments from the UK etc., or a timeline that doesn't match when you were abroad), and you way have had legitimate reasons to want to e.g. invest in Swiss shares or whatever at a later date when you retire to a cabin in the Swiss alps. Or whatever. If you are telling the truth about this, it is none of the HMRC's business that the money is sitting there unreported. This is the problem with going after these schemes: There are any number of completely legal - for good reason, often, - mechanisms that allow the unscrupulous to create sufficient plausible deniability that actually proving a case becomes incredibly hard. It's easy to sit and assume that of course these are tax evaders. Except some non-trivial percentage of them are not. HMRC risks not only not getting the actual tax evaders imprisoned, but not getting their hands on the money either, if they go to court on insufficient evidence. Going after just the money is a lot easier since people are often willing to pay to make the threat of further investigation go away even if they see the risk of prison as remote.
easytiger 12y ago
Or how about you let the authorities deal with it in a reasonable, case by case basis and get off your polemic high horse
- mercurial 12y ago
  Is it "polemic" now to expect that people pay taxes, and get punished when they try to cheat their way out of it?
  - chrisbennet 12y ago
    Apparently "Only the little people pay taxes." or go to jail. http://en.m.wikipedia.org/wiki/Leona_Helmsley http://en.m.wikipedia.org/wiki/Leona_Helmsley
  - easytiger 12y ago
    People do pay taxes. Very few don't. This kind of diatribe just gives governments mindshare to promote even more aggressive and punitive taxes.
    - mercurial 12y ago
      You mean that the people who got the most out of the system shouldn't be expected to contribute back the most?
      - easytiger 12y ago
        I knew you were going to say that.
      - vixen99 12y ago
        Most out of the system? In what way could this possibly be true? 100 billion is 1/6th of UK government expenditure in a year. Moreover that money was generated by these people not money creamed off the UK taxpayers. Simple arithmetic tells us that the people who get the most out of the system are the ordinary UK citizens who use government services .
hessenwolf 12y ago
What would be the value in it? Justice? What does that mean? Punishment? Or to send a warning? Would that really be effective? What would be the cost? Was there anybody in the pot that was expendable, economically?
- crdoconnor 12y ago
  >Or to send a warning? Would that really be effective? Yes. A lot of tax evaders who wouldn't even blink at a potential $500k fine would not take any risks if the were faced with real jail time. That means more tax revenue.
- mercurial 12y ago
  > Was there anybody in the pot that was expendable, economically? What do you mean by "economically expendable"?
  - tormeh 12y ago
    https://www.google.no/search?channel=fs&q=too+rich+for+prison&ie=utf-8&oe=utf-8&gfe_rd=cr&ei=BJnYVO2qEIGA8Qey8oGwDw https://www.google.no/search?channel=fs&q=too+rich+for+priso...
- chrisbennet 12y ago
  What does "expendable, economically" mean?
  - tormeh 12y ago
    https://www.google.no/search?channel=fs&q=too+rich+for+prison&ie=utf-8&oe=utf-8&gfe_rd=cr&ei=BJnYVO2qEIGA8Qey8oGwDw https://www.google.no/search?channel=fs&q=too+rich+for+priso...
toyg 12y ago
> Wouldn't this be a good opportunity to get some assholes It would, if there was an actual will to "get some assholes" in the first place. As reported by Private Eye several years ago, as soon as the current government got into power, several outstanding (and huge) tax-dodging cases were quietly settled, largely in favour of such dodgers. Once called on it, they reshuffled a couple of appointees and said it wouldn't happen again. I wouldn't be surprised to find the new bosses were told to put this list in the wrong drawer and accidentally forget about it entirely. The previous government would have probably used the list for a fundraising round - if you can sell peerages, you might as well sell pardons. The next government will likely replace a few appointees here and there, and if pressed they will claim cases are too old to be efficiently investigated, it was all the previous guys' fault, etc etc.
raquo 12y ago
I don't know the situation, but I wouldn't be surprised if there were too many important people on that list. Prosecuting the whole elite is not something that the elite typically does.
drapper 12y ago
House of Commons will be all about that today http://www.theguardian.com/news/live/2015/feb/09/hsbc-files-global-reaction#block-54d8aa2ee4b083959b485b24 http://www.theguardian.com/news/live/2015/feb/09/hsbc-files-...