HSBC bank says it is looking into allegations that criminals have used offshore accounts at its Jersey operation for money laundering.
The bank issued a statement after the Daily Telegraph newspaper said it was at the centre of a major investigation by HM Revenue and Customs .
HSBC said it was investigating “an alleged loss of certain client data in Jersey as a matter of urgency”.
HMRC said it had “received the data and we are studying it”.
“We receive information from a very wide range of sources which we use to ensure the tax rules are being respected,” the tax authority said.
In a statement, HSBC said, “Clamping down on those who try to cheat the system through evading taxes and over-claiming benefits is a top priority for us, and we value the information we receive from the public and business community.”
Owning an offshore bank account is not illegal. But it is illegal to hide the interest which has accrued on the sums held, and to avoid paying tax on that interest to HMRC.
Geoff Cook, of the trade organisation Jersey Finance, said, “This is a serious matter and we note HSBC’s immediate commitment to co-operating with any investigations carried out by the relevant authorities and welcome the clear position taken by the Jersey Financial Services Commission, that any failure to adhere to Jersey’s clear standards will be robustly investigated and acted upon.”
According to the Daily Telegraph, the tax authorities have obtained details of “every British client of HSBC in Jersey” based on information provided by a whistle-blower .
“These cases will be very complex, difficult and ultimately time consuming to unravel”
It is reported that the 4,000 offshore account holders include a well-known drug dealer living in Central America, bankers who face allegations of fraud and a man once dubbed London’s “number two crook”.
BBC business editor Robert Peston said, “It is really quite difficult to tell from this disclosure whether or not this is an example of HSBC yet again having, shall we say, laxer or weaker controls over who it takes money from.”
“The American authorities do think HSBC was, for too many years, too prone, or in a sense, too easily duped by terrorists and criminals who wanted to launder money. We just don’t have enough information whether or not this is an another example of those weak controls.”
Our business editor said he had been told by HSBC that this appeared to be a case of “whistle-blowers handing over bunches of bank names for whatever reasons”.
He added, “They don’t think they will emerge from this investigation to be shown to be particularly lax in their controls.”
Earlier this year, a US Senate report alleged that staff at HSBC’s global operations had laundered billions of dollars for drug cartels and terrorists in a “pervasively polluted” culture that persisted for years.
The report detailed how HSBC’s subsidiaries cleared suspicious travellers’ cheques worth billions, and allowed Mexican drug lords to buy planes with money laundered through Cayman Islands accounts
David Bagley, HSBC’s head of compliance since 2002, resigned from his post when he appeared before the US Senate committee in July.
In theory, HMRC should know about most of the HSBC accounts already.
In 2006, it established a crucial legal breakthrough which meant, for the first time, that it could demand that banks reveal the identities of UK taxpayers who hold accounts offshore.
Since then, the Revenue has been sending demands to hundreds of UK and foreign banks, asking them to do just that.
This has already brought in several hundred million pounds in taxes, interest and penalties, from people who confessed that they had been hiding money abroad.
HMRC has received the latest list of HSBC accounts from the whistle-blower only very recently.
But even if it has come with names and addresses attached, it will not necessarily be an easy matter to identify the people who own the accounts.
Ronnie Ludwig, a tax partner at the accountants Saffery Champness, said some accounts were likely to be in the names of nominee companies and trusts, which hide the identity of the beneficial owner.
Some accounts could also have a trigger clause, he explained, which means the money is moved swiftly to accounts in other offshore tax havens, such as the British Virgin Islands or the Cayman Island, if HMRC intensifies its scrutiny.
Ludwig told the BBC that even with an accurate list in its possession, HMRC would still have quite a task on its hands to sort through each account.
“HMRC is facing an uphill struggle in terms of its resources, because these cases will be very complex, difficult and ultimately time-consuming to unravel,” he said.
Headlines Newsview all
Tragedy hit the home of the former Minister of the Federal Capital Territory, Mallam Nasir El-Rufai, in the early morning of Tuesday when his son, ...
Blessing Okagbare wins women’s 100 metres gold in 10.85 seconds to increase Team Nigeria’s medals haul at the ongoing Commonwealth Games in Glasgow. Okagbare also erased ...
Another explosion hit Kano, coming just 24 hours after the state suffered three bomb explosions in different locations. Today’s blast took place at the NNPC ...
Rate this article
Iconic Nollywood actress, Shan George has exclusively disclosed to Nigeriafilms.com that she is currently with a man she calls her husband and not messing around ...
Fire-brand preacher and General Overseer of Christ Royal Family International Church, Bishop Tom Samson, is set to hold the 10th edition of ‘It is War’, ...
Celebrities campaigning for aspiring political leaders have since become a trend in Nigeria and many artistes long to be approached by politicians because it is ...
Weddings are event where elegance meets fashion. Most people pay special attention to what they wear to wedding ceremonies so as not to be disgraced ...
To some residents of Lagos, Mushin area of the state is believed to be a place where hoodlums and youths with no future ambition are ...
Former Minister of the Federal Capital Territory (FCT), Nasir El-Rufai has lost his son, Hamza, on Tuesday, July 29, 2014, in a fatal motor accident.The ...
Screen goddess and former aide to Governor Rochas Okorocha of Imo State, Nkiru Sylvanus, is no doubt a pretty actress who is loved by many, ...
Media personality, Fummi Iyanda clocked 43 on Sunday, July 27, 2014 and she took her time to advice young people.The pretty lady urged many to ...
Popular Tinsel actor, Victor Olaotan, has disclosed in an exclusive chat with Nigeriafilms.com that the Federal Government needs to invest more in Nollywood in order ...
Wave-making comedian, Patrick Onyeke aka Kunle Thomas, has disclosed that his comedy skit currently showing on television has been in the pipeline for about two ...