Friday, October 23, 2020

Ex-HSBC Banker Pleads Guilty in $1.8 Billion French Tax Case

-

The former chief executive officer of HSBC Holdings Plc’s Swiss private bank pleaded guilty to helping wealthy clients hide assets worth at least 1.6 billion euros ($1.8 billion) as French prosecutors flex their muscles to tackle white-collar crime.

Peter Braunwalder was fined 500,000 euros and given a one-year suspended jail sentence, according to a Paris court ruling on the plea. The 68-year-old admitted that he took part in helping clients evade taxes between 2006 and 2007 by opening clandestine Swiss bank accounts and setting up offshore trusts or providing fake loans.

The former HSBC executive also pleaded guilty to illegally approaching French residents to encourage them to shift funds to Switzerland during the period, according to the previously unreported French ruling dated Jan. 29 and released this week. Braunwalder retired from his role at HSBC a decade ago.

The HSBC case is part of a French crackdown on tax fraud and money laundering operated through Switzerland that’s seen the conviction of a former minister and UBS Group AG ordered in February to pay a record 4.5 billion-euro fine after being chastised by a judge for criminal wrongdoings of “an exceptionally serious nature.”

Seeking Convictions

- Advertisement -

The Braunwalder guilty plea comes over a year after HSBC paid 300 million euros to resolve allegations in the same case. It’s a sign that French financial prosecutors are determined to pursue individuals even after collecting large settlements.

Related: HSBC agrees to 300 million euro settlement of Belgian tax fraud case: prosecutors

Marion Lambert-Barret, a Paris lawyer who isn’t involved in the HSBC investigation, says Braunwalder’s sentence sends a clear deterrent message.

“The Parquet National Financier is heading the direction it said it would: Even if a company reaches a settlement, prosecutors will seek convictions for individuals to punish the underlying behavior they consider fraudulent,” she said by phone.

Lambert-Barret said the outcome for Braunwalder shows suspects can negotiate with criminal authorities to avoid a drawn-out and uncertain process, but discussions and a voluntary plea deal don’t lead to a more lenient sentence.

- Advertisement -

In the UBS over similar allegations that covered a much lengthier time period, three former executives each got 12-month suspended jail terms and 200,000-euro fines, while a fourth received a more severe penalty, a suspended sentence of 18 months and a penalty of 300,000 euros.

Related: Ex-HSBC employee in jail over $87,000 customer accounts scam

Stolen Data

French authorities began scrutinizing HSBC’s Swiss private bank after Herve Falciani, a former information technology worker at the firm, stole client account details from the Geneva office in 2008 and shared the data with investigators.

France’s PNF and Braunwalder’s lawyer, Jean-Pierre Spitzer, declined to immediately comment, while HSBC representatives in France didn’t respond to calls and an email. French investigators dropped charges targeting another suspect in the HSBC Private Bank case.

HSBC’s November 2017 settlement was the first using a new procedure in France that enables companies to resolve investigations without pleading guilty. Societe Generale SA agreed last year to pay 250 million euros to end a bribery case and French fund manager Carmignac Gestion said in June it would pay 30 million euros to settle a tax-fraud case.

MUST READ

Goldman Sachs agrees $3 billion settlement with US DoJ over 1MDB corruption scandal

Goldman Sachs has agreed to pay nearly $3bn (£2.3bn) in the US to end a probe of its role in Malaysia's 1MDB corruption scandal. The...

Hong Kong fines Goldman Sachs $350 million over 1MDB scandal

Goldman Sachs ignored multiple red flags over the multibillion-dollar fundraisings it arranged for state fund 1Malaysia Development Berhad, Hong Kong’s financial regulator said on...

Texas attorney general Ken Paxton fires top aide who accused him of bribery

Lacey Mase, one of the top aides who accused Texas Attorney General Ken Paxton of crimes including bribery and abuse of office, has been fired, she told The...

Fundraiser Elliott Broidy pleads guilty in foreign agent case linked to 1MDB

Major Republican Party and Trump fundraiser Elliott Broidy pleaded guilty Tuesday to acting as an unregistered foreign agent, admitting to accepting millions...

Germany issues international arrest warrant for founders of law firm at the centre of Panama Papers

Germany has issued international arrest warrants for the two founders of the firm at the centre of the tax haven scandal exposed by the...
Advertisement
Advertisement

Latest News

This Week

La Joya Housing Authority former maintenance director charged with fraud

The former maintenance director for the La Joya Housing Authority is the latest person to be indicted in a case in which the former...

Fundraiser Elliott Broidy pleads guilty in foreign agent case linked to 1MDB

Major Republican Party and Trump fundraiser Elliott Broidy pleaded guilty Tuesday to acting as an unregistered foreign agent, admitting to accepting millions...

U.S appeal court upholds conviction of former Senator Jon Woods in bribery case

The 8th Circuit Court of Appeals upheld the conviction of former Republican Sen. Jon Woods for a bribery and kickback scheme. That decision also upheld the...

Rapper Nuke Bizzle charged with COVID-19 relief aid fraud after bragging in music video

A rapper who bragged about defrauding the government’s unemployment program in a music video has been arrested on federal charges of carrying out the...
Advertisement

Adblock Detected!

Our website is made possible by displaying online advertisements to our visitors. Please consider supporting us by whitelisting our website.

Enable Notifications    Ok No thanks