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U.S. fines HSBC’s private Swiss banking arm

Christian Fernsby |
HSBC Holdings’s Swiss private banking arm has agreed to fork over nearly $200 million in unpaid taxes, improper fees and fines after confessing to helping Americans evade federal taxes, the U.S. Department of Justice announced.

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Topics: U.S.    FINE    HSBC    SWISS    BANKING   

“HSBC Switzerland conspired with U.S. accountholders to conceal assets abroad and evade taxes that every American must pay,” Stuart Goldberg, acting chief of the department’s tax division, said in a statement.

“Banks, asset managers and other financial firms enable such crimes — and we will hold these institutions to account, right along with the taxpayers that use them to facilitate and disguise illegal activities,” he said.

Federal prosecutors say that for a decade starting in 2000, Geneva-based HSBC Private Bank helped US customers hide offshore assets from US authorities, using code-named and numbered accounts, hold-mail agreements and shell corporations in tax havens such as Panama, Liechtenstein and the British Virgin Islands.

In 2002, the bank had more than 720 undeclared US client relationships with a total value of more than $800 million — five years later, this had reached almost $1.3 billion, the justice department said.

Under the terms of a settlement, conspiracy charges filed against the bank will not prosecuted for a period of three years “to allow HSBC Switzerland to demonstrate good conduct.”

However, the settlement does not mean individuals will not be prosecuted separately, the statement said.

HSBC has agreed to pay $60.6 million in unpaid taxes while forfeiting another $71.9 million in fees earned on the undisclosed accounts, in addition to a $59.9 million penalty.

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