The French financial prosecutor's office has requested that HSBC's Swiss private bank be sent to trial in France to answer charges over a suspected tax-dodging scheme for wealthy customers, a judicial source said on Friday.
The request brings the Swiss unit one step closer to facing trial after an investigation led by local magistrates into an alleged fraud involving thousands of French tax payers ended last month.
Parent company HSBC Holdings Plc, the world’s second largest bank, faces a separate ongoing French investigation.
Prosecutors want the Swiss bank tried on suspicion of money laundering related to tax fraud and unlawful soliciting of clients, the source said, adding that the “habitual” manner of the alleged fraud made it an aggravated crime.
Another, non-judicial, source close to the case said there had been talks on a plea deal which had failed.
Under French law, the Swiss bank risks a fine amounting to half the value of the funds subject to the suspected fraud. Le Monde estimated on Friday the amount of hidden assets at more than 5 billion euros.
HSBC’s Swiss private bank said the request for trial was a normal step that did not prejudge the result of the case. “The outcome of the matter is not determined as of today,” a spokesman said.
The bank now has one month to respond to French judicial authorities, after which magistrates will have the final word on whether to hold a trial.
Le Monde reported on Friday that HSBC had refused a plea deal that would have avoided a trial but required it to pay a 1.4 billion euro ($1.48 billion) fine.
HSBC Holdings has admitted failings in compliance and controls in its Swiss bank. It also faces investigation by U.S. authorities and an inquiry by British lawmakers after reports it helped customers to conceal millions of dollars of assets in a period up to 2007.
Cases against specific clients of the Swiss bank are already in progress in France and prosecutors in Geneva have also opened a criminal probe into the bank.
Investigating magistrates originally believed that some 3,000 French citizens had been involved in the affair. That number has now grown to 8,936 citizens who illegally put their money with the Swiss unit between 2006-2007, Le Monde said.
“The amount held by just French clients, hidden behind offshore companies furnished by HSBC Private Bank, comes to 5.1 billion euros,” the newspaper reported.
Date created : 2015-03-13