US government faces pressure after biggest leak in banking history
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.
On Tuesday, Maryann Hunter, who is on the board of governors of the Federal Reserve, and has some responsibility for regulation of foreign banking organizations 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.
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.
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?”