Whistleblower Herve Falciani
Whistleblower Herve Falciani, whose leaked data is the origin of the massive HSBC scandal, says a unique opportunity has opened up for India's black money probe now that Switzerland has launched a criminal inquiry into allegedly money-laundering by Europe's largest bank.
Here are 10 big developments in this story:
Last week, HSBC's Geneva office was raided. In 2008, Falciani, an IT employee with the bank, leaked data that led to the biggest-ever breach in banking security. His information reveals how HSBC helped wealthy clients evade taxes and violate financial laws.
In 2010, the French government gave Delhi a list of more than 600 Indians who held accounts at HSBC in Geneva. This was only a small fraction of the data leaked by Falciani.
The list doubled earlier this month, when fresh investigation of Falciani's data led to SwissLeaks, which revealed that HSBC in Geneva helped clients in more than 200 countries evade taxes on accounts containing $119 billion.
That disclosure resulted in Switzerland launching its criminal case. Falciani, 43, who is unemployed today, says the Swiss case will make it easier for India to seek collaboration with the prosecutors.
So far, Switzerland has resisted efforts to reveal much information, citing its notoriously tight secrecy laws, tax treaties, and its inability to act on Falciani's "stolen data."
Banking secrecy laws haven't changed though, so while the Swiss are likely to be less rigid about sharing data, that is unlikely till the investigation reaches an advanced stage.
To make real progress, investigators will need detailed information on the processes the bank followed, which Falciani claims his new data will show. That data is being given to Indian officials who contacted him via NDTV in November.
Falciani says the information India already has is limited to details such as client profiles and estimates of how much money is present in accounts. But the new data, he says, will help establish how local banks and other intermediaries allowed money to be moved, in some cases, of terror financing, drug mafia.
Because India is also taking legal action now against HSBC, Falciani feels its investigators will soon be able to collaborate with other countries already taking criminal action against HSBC, like France, Belgium, Argentina.
On Sunday, income tax officials reportedly visited HSBC's headquarters in Mumbai. The bank has received a summons and will be interrogated, according to HSBC's own annual report yesterday.
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