Are you so used to stories about bankster money laundering (for narcotics smuggling, a source of ready funds enabling excessive lifestyles, or other questionable ventures) that they are not exciting enough to get you going anymore?
They're hoping so.
Cause no one (except maybe a confused new hire or two) is going to jail.
And the amount of the fines these financial mammoths might be asked to pay are laughable.
Read on, MacDuff!
It'll make your Monday.
By Paul Lewis, The Guardian UK
09 February 15
he US government will come under intense pressure this week to explain what action it took after receiving a massive cache of leaked data that revealed how the Swiss banking arm of HSBC, the world’s second-largest bank, helped wealthy customers conceal billions of dollars of assets.
The leaked files, which reveal how HSBC advised some clients on how to circumvent domestic tax authorities, were obtained through an international collaboration of news outlets, including the "Guardian," the French daily "Le Monde," CBS 60 Minutes and the Washington-based International Consortium of Investigative Journalists.
The files reveal how HSBC’s Swiss private bank colluded with some clients to conceal undeclared “black” accounts from domestic tax authorities across the world and provided services to international criminals and other high-risk individuals.
The disclosure amounts to one of the biggest banking leaks in history shedding light on some 30,000 accounts holding almost $120bn (£78bn) of assets. Of those, around 2,900 clients were connected to the US, providing the IRS with a trail of evidence of potential American taxpayers who may have been hiding assets in Geneva.
A trail of evidence
The data was leaked by a computer expert turned whistleblower working in HSBC’s Geneva office. French authorities later obtained the files and shared them with the US Internal Revenue Service in 2010. That year, amid growing scrutiny from US tax authorities, HSBC’s private bank in Switzerland stopped doing business with US residents entirely.
The US Department of Justice and IRS have been investigating HSBC’s Swiss banking operations ever since but the scale of those inquiries remain unclear.
Confronted by the "Guardian"’s evidence, HSBC admitted wrongdoing by its Geneva-based subsidiary. “We acknowledge and are accountable for past compliance and control failures,” the bank said in a statement. The Swiss arm, the statement said, had not been fully integrated into HSBC after its purchase in 1999, allowing “significantly lower” standards of compliance and due diligence to persist.
HSBC added: “Beginning in 2008 HSBC began to put a more rigorous control structure in place in the Swiss private bank by, for example, introducing a new policy on US persons and reducing the number of US taxpayer accounts. In 2010, the Swiss private bank decided to exit US resident client business entirely.”
However the Swiss files, made public for the first time by the Guardian and other media, are likely to raise questions in Washington over whether there is evidence to prosecute HSBC or its executives in the US. Lawmakers are also expected to question the rigour of IRS investigations into undeclared assets hidden by US taxpayers in Geneva.
The IRS said it “remains committed to our priority efforts to stop offshore tax evasion wherever it occurs”, and pointed out it has collected more than $7bn from a program, introduced in 2009, that allows US taxpayers to voluntarily disclose previously undeclared offshore accounts.
However the IRS declined to say how much it has retrieved in back taxes, interest and penalties as a result of investigations stemming from the leaked HSBC Swiss data. The IRS also declined to say how many US taxpayers have been investigated as a result of the leak, citing taxpayer privacy and the Tax Information Exchange Agreement (TIEA), a treaty that renders secret information shared between the US and France. The DoJ said it “does not confirm or deny the existence of an investigation”.
Senior Senate sources said government officials are likely to be questioned on Capitol Hill over what action was taken after the US received the leaked HSBC data almost five years ago.
Intense scrutiny in DC
On Tuesday, Maryann Hunter, who is on the board of governors of the Federal Reserve, and has some responsibility for regulation of foreign banking organisations operating in the US, will give evidence to the Senate banking committee. Two days later, Geoffrey Graber, a deputy associate attorney general at the DoJ who oversees settlements with Wall Street banks, will appear before a House judiciary subcommittee. Both are expected to be questioned about the leak.
Public disclosure of the leaked files comes at a critical moment for HSBC in the US, where prosecutors have already warned the bank is operating under a “sword of Damocles”. HSBC global and its US bank was forced to pay a $1.9bn fine two years ago after the DoJ uncovered evidence HSBC subsidiaries had enabled clients to breach US sanctions against Cuba, Sudan and Iran and, due to oversight failures, allowed Mexican drug cartels launder billions of dollars.
That deal was unveiled in December 2012, six months after a damning investigation into HSBC global and its US affiliate by the Senate permanent subcommittee for investigations. The deferred prosecution agreement made no mention of evidence of tax evasion connected to HSBC’s Swiss banking division, even though the US government had received the leaked data two years earlier.
The 2012 settlement was overseen by Loretta Lynch, who was then US Attorney for the Eastern District of New York. Lynch is currently Barack Obama’s current nominee for attorney general.
At the time, the HSBC settlement was heavily criticised by both Republicans and Democrats for allowing the bank to escape criminal indictments and keep the charter which enables it to operate in the US. Lynch and other senior DoJ officials defended the deal, pointing out it committed HSBC to a five-year plan to stamp out money laundering and other illicit practices, an ongoing process that is being overseen by an independent, court-appointed monitor.
Files pertaining to HSBC’s private bank in Switzerland were obtained by a Geneva-based computer technical analyst, Herve Falciani, between 2006 and 2007. The files were later seized by French authorities and have been quietly shared with governments around the world, some of which have mounted investigations into tax evasion.
The HSBC leak has sometimes been referred to as the “Lagarde List”, after the then French finance minister, Christine Largarde, who shared portions of the HSBC data with her counterpart in Greece. The Guardian has reviewed the list of US clients with accounts in HSBC’s private Swiss bank. They include prominent film directors, sports stars, hedge fund managers, retail magnates and major political donors. The HSBC files provide no indication as to whether US clients declared their assets to the IRS.
In a recent court filing, Michael Danilack, a deputy commissioner at the IRS in Washington, said he asked the French for details of US individuals with undisclosed accounts in HSBC’s Swiss bank in early 2010. The request was granted and he received a CD file containing data leaked from HSBC’s Swiss bank “on or about April 6, 2010”, he said.
Prosecuting cases in US
There is evidence in that at least some US clients of HSBC’s private Swiss bank have been prosecuted. HSBC was found to have handed over “bricks” of $100,000 a time to US surgeon Andrew Silva in Geneva, so that he could illegally mail cash back to America. He mailed the sum to an address of his home state in Virginia in sums of less than $10,000, to avoid declaring the packages to US customs. He pleaded guilty to criminal tax evasion in 2010.
Another US client, Sanjay Sethi, pleaded guilty in 2013 to cheating the US tax authorities by maintaining $4.7m in accounts in Switzerland and India. The prosecution in his case said a high-ranking HSBC executive based in London promised on Swiss undeclared account would allow his assets “to grow tax-free and bank secrecy laws in Switzerland would allow Sethi to conceal the existence of the account”.
Last year, there were additional US court cases, in New York and Virginia, to enforce IRS summons for records of undeclared HSBC Swiss accounts held by two US taxpayers.
It is not known how many other investigations have been brought against US taxpayers over undeclared assets in HSBC’s Swiss bank, or whether the DoJ is considering prosecuting the bank or its executives. Almost five years after the data leaked by Falciani was passed onto US authorities, the investigations into HSBC’s private Swiss bank appear to be ongoing.
HSBC’s most recent annual report, published last year, said the bank was under investigation in the US by the DoJ and IRS “regarding whether certain HSBC companies and employees acted appropriately in relation to certain customers who had US tax reporting requirement”. It added: “In connection with these investigations, HSBC Private Bank Suisse SA, with due regard for Swiss law, has produced records and other documents to the DoJ and is cooperating with the investigation.”
HSBC also said in the report that the DoJ had requested additional information from HSBC’s Swiss bank “regarding the transfer of assets to and from US person related accounts and employees who serviced those accounts”. The report disclosed the fact that the DoJ informed HSBC’s Swiss bank, in August 2013, that it was not be eligible for the non-prosecution agreements made available to other Geneva-based banks.
It also warned HSBC shareholders there was a “high degree of uncertainty” over the ongoing US investigations and it was possible the bank could be forced to pay “significant” fines and penalties.
The DoJ was under pressure to go beyond financial penalties – to bring criminal charges against HSBC or its bankers – in July 2012, after the Senate’s permanent subcommittee on investigations published its crushing 330-page report documenting how the bank’s lax anti-money laundering controls had been exploited by drug traffickers.
HSBC’s head of compliance, David Bagley, resigned before the committee during a gruelling cross-examination from senators. Six months later, in December 2012, HSBC negotiated the settlement with the DoJ in which it agreed to pay almost $2bn and commit to a five-year plan to stamp out illicit practices, overseen by the independent monitor.
The settlement proved controversial because it stopped short of criminally indicting the bank or its executives; lawmakers from both parties complained it revealed some Wall Street institutions were considered “too big to jail”.
HSBC deal ‘fundamentally wrong’
The Democratic senator from Massachusetts Elizabeth Warren famously labelled the HSBC deal “fundamentally wrong”. “HSBC paid a fine, but no individual went to trial, no individual was banned from banking and there was no hearing to consider shutting down HSBC’s actives in the US,” Warren said at a Senate committee hearing in 2013. “How many billions of dollars do you have to launder for drug lords and how many sanctions do you have to violate before someone will consider shutting down a financial institution like this?”
At the time of the HSBC settlement, Lanny Breuer, then the head of the DoJ’s criminal division, insisted the bank was not being let off the hook. “It’s the first time in history that a foreign institution is going to have a monitor,” Breuer said. “There’s a sword of Damocles right now over HSBC.” Lynch told a CBS news at the time that she expected HSBC to “literally turn their company inside out” as part of the agreement.
Lynch was pressed over the HSBC settlement by Democratic senator Richard Blumenthal last week, during a confirmation hearing by the judiciary committee. Obama’s candidate for attorney general did not comment on the specifics of the deal, but told senators she was committed to “aggressively” pursuing white collar crime. “No individual is ‘too big to jail’,” she said. “And no one is above the law.”
HSBC is now just over two years into its reform plan, and has been deemed to be complying with the terms of the settlement. However the court-appointed monitor, Michael Cherkasky, who oversees a team of banking investigators who review HSBC’s changes, has expressed some concern over the pace of reform. Cherkasky’s most recent assessment of HSBC’s ongoing efforts to clean up its act has once again concluded it could do better, according a recent report in the Wall Street Journal which cited people familiar with its findings.
Meanwhile, HSBC remains entangled with US law enforcement and regulators on other fronts. In November, the bank reached with the the Securities and Exchange Commission in which HSBC agreed to pay $12.5m to resolve charges that its Swiss private banking division illegally provided investment and brokerage services to US clients.
The following month, the IRS issued a court summons to HSBC USA to “produce information about US taxpayers who may be evading or have evaded federal taxes” using a company called Sovereign Management & Legal Ltd, which trades via the website named ‘offshore-protection.com’. Prosecutors believe the US correspondent bank accounts that HSBC USA holds for Sovereign’s banks in Panama and Hong Kong are likely to have records of financial transactions by US clients who may have evaded taxes.
In May last year, the DoJ revealed it was prepared to bring criminal charges against banks suspected of involvement in tax evasion, when it forced Credit Suisse to plead guilty to a major conspiracy to aid US taxpayers filing false returns to the IRS. Under a plea agreement, Credit Suisse paid a total of $2.6bn.
“This case shows that no financial institution, no matter its size or global reach, is above the law,” the Attorney General Eric Holder said at the time. “Credit Suisse conspired to help US citizens hide assets in offshore accounts in order to evade paying taxes. When a bank engages in misconduct this brazen, it should expect that the Justice Department will pursue criminal prosecution to the fullest extent possible, as has happened here.”
# turtleislander 2015-02-09 11:51
I am reminded of "Paper Moon."
"It's a Barnum and Bailey world; it's as phony as it could be". Let the nation, especially Fox news devotees and other celebrity worshipers know the names of the prominent figures in sports and entertainment who are evading the same taxes most of us can't hide in Switzerland or other tax havens. We aren't rich enough. And it's much more than 99% of us."Private bank" usually means a very high net worth individual is the only one who can even walk through the door. $50,000,000 is the entry fee for at least one private bank.Let's pull back the curtain and see our idols naked in their greed. We cannot be afraid of the truth.
# Jim Young 2015-02-09 12:09
Reminds me of the Bank of Credit and Commerce International (BCCI) and the movie, "The International" hopefully an over the top dramatization of violence more than concentrating the financial shenanigans.
The movie used "IBBC" instead of "BCCI" which inspired movie.
It would be nice to see HSBC suffer a similar fate as the once 7th largest private bank in the world, BCCI (unless HSBC absorbed BCCI), whether or not they make a movie or 2 about it.
Seriously, though, what does it take to break up these criminal organizations, once revealed? Seems last time (UBS?) they jailed the whistle blower, and never did follow up on more than a tiny fraction of the tax evaders.
Can we sue our government for not prosecuting them?
# Working Class 2015-02-09 12:56
This is not the first time a Swiss Bank has been caught doing this. There have been tax holidays where US citizens were allowed to repay what they owed rather than face criminal charges. This is total bullshit. I wonder if the reason Mitt did not want to reveal his past tax records, beyond just a couple years, is because it would have revealed he was amongst those who were quility of hiding money in Swiss accounts and getting caught. Keep in mind Mitt was on McCain's short list for VP and the McCain campaign did see Mitts tax records going back several years - result - they picked Palin. Enough said.
# PeacefulGarden 2015-02-09 13:51
The FBI should raid all of the HSBC bank buildings and shut them down immediately. Why these buildings are running as if nothing has happened is crazy. Wait, no, it isn't crazy, it is our state and federal government allowing one of the largest criminal organizations to run its business on our streets. Yet again, perhaps our government is a criminal organization allowing another criminal organization to run its business on our streets. Yes, that is it!
We vote for criminals, no, they are criminal puppets. Puppets that eat the poor, and feed them drugs, then put them in a prison, then let them go, then feed them drugs, then put them in prison.... all at the behest of the top 1 percent.
I remember when I read that Iceland locked up the crooks and disavowed their fraudulently incurred public debt.
Those were the days.
Decided to become a nation of snipers.
In every way.
Watch out for US!
Wednesday, Feb 4, 2015
"The truth is unspeakable," says real-life American sniper who wants nothing to do with a dangerous propaganda filmDennis Trainor Jr.
Bradley Cooper and Madeleine McGraw in "American Sniper"
(Credit: Warner Bros. Entertainment)
Hearing Garett Reppenhagen describe how he felt the first time he shot someone is like listening to an addict talk about his first time injecting heroin. “I leveled my M-4, put him in my iron sights, and took three shots. One of them hit him center mass and he went down in the middle of the road. I had this instant sense of satisfaction, overwhelming excitement and pride. It was really kind of an ecstatic feeling that I had.”
I had just seen the film “American Sniper,” the revisionist propaganda piece of myth-making and nationalistic war porn being sold to us by Bradley Cooper, Clint Eastwood and screenwriter Jason Hall as an apolitical character study. I wanted to talk with an actual American sniper, and Garett was generous enough to pick up the phone. (He’s also written for Salon.)
Garett has a lot in common with Chris Kyle. Both entered the military at an older age; both spent endless hours on rooftops, in windows or in trash piles in Iraq, “doing their job”; both were in Iraq in 2004 hunting al-Qaida leader Abu Musab al-Zarqawi; and both spent time after active duty trying to help veterans.
The similarities end there.
I’ll admit, listening to Garett talk about his first kill, taking place when he was ambushed and life presented him a clear choice — kill or be killed — I’m a touch envious. Life rarely offers us such moments of clarity. As haunted as Garett and others who struggle with post-traumatic stress disorder are because of events like this one, he was describing a moment so simple and so heightened because of that simplicity.
“I was training for three years to be in the moment to do that, and I did it,” Garett tells me. “It was really an ecstatic feeling that I had. I remember looking at the other guys, seeing if they saw it, because I wanted somebody else to witness it.”
In 2004, while Garett was in that life-or-death firefight, the mundane questions life presented me with could easily paralyze me. What should we do for dinner? Where to go on summer vacation? Boxers or briefs? This paralysis is a common side effect of privilege: We get to sweat the small stuff when the big stuff is never in doubt. When faced with a kill or be killed moment, one answers the former, or one is dead. It does not get any clearer than that. I fear that if I found myself in Garett’s 2004 shoes, I would have soiled my boxers and my briefs.
The only time Chris Kyle says he soiled himself was on purpose. He would not leave his position to answer nature’s call so he just kept his rifle trained and went to the bathroom in his pants. Such was his commitment to God and country. In a micro sense, it served him well. In a macro sense, however, our invasion and occupation of Iraq was not a “kill them or they will kill us” scenario. History has borne that fact out, and that lack of context makes “American Sniper” a dangerous film.
Dangerous because kids will sign up for the military because of this movie. Dangerous because our leaders have plans for those kids. Some will kill. Some will be killed. Or worse. There is no narrative existing outside the strict confines of “American Sniper’s” iron sights that allows for the war on terror to be over. It’s like a broken record looping over and over: attack, blowback and attack. Repeat.
Imagine the cultural shift that needs to take place for screenwriters to write, studios to greenlight, and A-list Hollywood actors to portray an American hero who says something like this in a blockbuster movie:
“You feel like there is this debt that you build for every life that you take,” Garett tells me. “You feel like you owe the world something because you left it without this other person that could have done something amazing. I think about all of these soldiers coming out of the U.S. military and helping them get jobs and education and hearing about what they aspire to do and be in the world. And I wonder about all of the Iraqis, Syrians and others that we killed in that country and what they aspired to be.”
Garett wonders about the mothers of those we killed in Iraq. What aspirations were dashed when an occupying force killed their children, for whom they invested so much of their lives?
He did not keep track of his kills and he hates that I ask him for a number.
“I wasn’t keeping track and oftentimes there was no confirmation. I feel it didn’t make me a better soldier and certainly doesn’t make me more of a man. If Chris Kyle got 160 confirmed kills, I joke and say that I missed 160 times. I wish that was true. We are talking about human beings and I hate quantifying that. Each life is so precious. We destroy that every time. One was too many, the truth is unspeakable.”
Garett came home and began speaking out. He still does, in fact.
“I do antiwar talks in high schools and colleges. I stopped telling war stories at these events because no matter how bad and awful it sounds, you can still see the look in kids’ eyes that say, ‘That is the rite of passage, that is how I become a man. I have to go there and live through that horrible shit to know that I am an adult.’”
Reppenhagen is certain there will be young kids who join the military because of the movie “American Sniper.” Life, however, is never as neat as Hollywood.
Take Garett’s first hit, the one he described as giving him a feeling of ecstasy. The feeling did not last long. His target was not dead.
“I remember looking back and he was down in the middle of the road arching his body, spinning on his back and screaming and pulling on his stomach as if I shot him with an arrow and he was trying to pull it out. All the sense of satisfaction just washed away and this horror filled it — this sadness, anger and frustration. I was mad at him that he just didn’t die. I ended up putting another three rounds down and he finally stopped moving. That was the first time I took another life.”
There is a long pause on the other end of my phone.
“He looked like he could have been my father. Who knows why he was out there fighting. A lot of people were fighting us because they did not want to be occupied or because they had family members who were hurt or killed and they wanted to get some sort of vengeance. By the end of my tour, it was really hard to justify killing them. We should not have been there in the first place.”
While in Iraq, Garett was told by an army chaplain that a stronger belief in God would alleviate the guilt he was feeling. God was on America’s side, and Garett was fighting for God and country. Get over it, soldier.
Once home, he sought treatment for his PTSD from a Veterans Administration hospital and heard the same message delivered in a different way.
“I was taken aside more than once at the VA [during group therapy] and told that the VA is not a platform to express my political views. My recovery hinged on the fact that I felt guilt and shame over committing atrocities against an occupied country. We went over there and brutalized and oppressed, and that is part of my psychological and moral injuries. If I can’t talk about it at the VA, then the VA can’t help me.”
Garett’s views are “political,” but the worldview of Chris Kyle as brought to life in “American Sniper” is not. It may be true that it is good for box office for the creators of “American Sniper” to pretend that their movie is not a political one, but if Cooper and Eastwood actually believe that, any narrative not draped in yellow ribbons and billowing red, white and blue flags cannot penetrate the cloak of white imperial privilege they have pulled over their heads.
Which is unfortunate, and not just for those of us who are insulted by a movie that so ignores important historical context as to cross the line from art to propaganda. It robs movie lovers of a better movie. Allowing such complexities into the narrative, or even framing the context of Kyle’s time in Iraq truthfully, would have made it a stronger story.
We are living through a moment in time where a perverse experiment has gone wrong and led to the creation of an out-of-control monster. In this case, the monster itself is the blowback-inducing, homicidal bull in cultural, religious and geopolitical china shops that has been U.S. foreign policy for at least the past 75 years. That concept, personified, is the myth of Chris Kyle that is breaking box office records and marching toward the Oscars with all of the pomp, precision and sense of a rightful place at the head of the line displayed by the Marine Corps Marching Band at the Rose Bowl Parade.
In addition to the outright lies (weapons of mass destruction, a connection between Iraq and 9/11, etc.), the main ingredient of this nightmare is the belief in American exceptionalism: the wind beneath the wings of the 19th century concept of Manifest Destiny. The offspring of that concept, we can call it Manifest Destiny’s child, is a privileged, spoiled, brutal bully on the world stage.
That Chris Kyle, nurtured as he was by the insidious worldview of Manifest Destiny’s child, turned out the way he did makes him common.
That someone like Garett Reppenhagen emerged from this experiment honestly facing down his own demons and the demons of his country makes him a hero, worthy of a major motion picture in his own right.
Dennis Trainor Jr. directed the documentary "American Autumn," and is the host of Acronym TV. Twitter: @DennisTrainorJr
John Paulson: January Genius
Ringleader Of Insider-Trading “Fight Club” Didn’t Want Any Sarcastic Comments With His Inside Information
SAC Can’t Even Put Ten Days Of Insider Trading Behind It
Wait, Is It Not Typical Of JPMorgan To Hire People People Who Send “Sexually Explicit Emails” To HR And Are Described As “The Worst…Candidate Ever”?
Laughing myself silly after reading the last article.
I needed that now.