Swiss prosecutors have raided the offices of HSBC Suisse in Geneva in an inquiry into money-laundering and tax evasion.
Swiss police sources commented that they are investigating "persons unknown for suspected aggravated money laundering" at HSBC Private Bank (Suisse) which has been headline material since last week, especially in Portugal as details of Swiss bank account holders were released by the International Consortium of Investigative Journalists after computer files were stolen by an HSBC employee.
A spokesman for HSBC said that its staff were "co-operating with the Swiss authorities" - not that they have much option at a bank that now has zero morale and big questions over its future.
The Swiss authorities are deeply disturbed by allegations that HSBC account managers have been helping their clients evade tax and that some have been travelling overseas with large sums of money to deliver to clients.
To the sound of the stable door softly closing at HSBC Suisse, the chief executive Franco Morra confirmed that staff had closed accounts from clients who "did not meet our high standards," adding the usual platitudes that these alleged actions were a ‘long time ago, old business model, no longer acceptable’ etc etc.
Thanks to the actions of the HSBC computer expert, Portugal’s tax authority now is working on a list of 611 HSBC depositors holding a total of €856 million, all of whom have links to Portugal whether by residency or as passport holders, and is working its way through to check deposits against declared interest income and assets going back years.
In the UK, HM Revenue & Customs was given the leaked data by the International Consortium of Investigative Journalists in 2010 and so far has identified 1,100 people who had not paid their taxes.
HSBC management in Switzerland said it is "accountable for past control failures" but said the bank now had "fundamentally changed" which it may have done but it still is in fundamental trouble with tax authorities across the world whose citizens have been shielded by the secrecy offered to holders of Swiss bank accounts.
In a futile effort to distance itself from the tax evasion storm, the bank’s statement included such gems as, "We acknowledge that the compliance culture and standards of due diligence in HSBC's Swiss private bank, as well as the industry in general, were significantly lower than they are today."
This is a sub-standard explanation even for a bank and the Swiss investigators will be looking for heavy fines, jail and retribution from HSBC management to assure the world that its covert banking practices accord at least with a basic level of acceptable ethics.
The head of HSBC worldwide at the time of the alleged wrongdoing was the Reverend Stephen Green who later was made a Conservative peer and became Trade Minister just eight months after the UK authorities has been sent the blacklist of depositors.
The current Rev Lord Stephen Green of Hurstpierpoint is the author of a book titled, 'Serving God; Serving Mammon' so at least now we know which side of the fence his true interests lay.
Green has stepped down from the Chairmanship of TheCityUK's advisory council, a body which promotes British banks and the financial services industry.
The formerly secret account details that now are in the open cover 2005-07 and expose 30,000 accounts holding the equivalent of €105 billion.
