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HSBC Leak Implicates 2,000 Names in the Diamond Trade

Feb 9, 2015 9:50 AM   By Jeff Miller
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RAPAPORT... An analysis conducted by the International Consortium of Investigative Journalists (ICIJ), in cooperation with French newspaper Le Monde, revealed that almost 2,000 of HSBC Swiss private bank's clients are associated with the diamond industry and face charges of tax evasion and money laundering. This list included Emmanuel Shallop, who was subsequently convicted of dealing in blood diamonds, though his  attorney told the report's authors that he would not provide any comment.

The journalists also named Omega Diamonds in the report, to which the company's  attorney responded,  “The tax dispute between Omega Diamonds and the Belgian tax authorities involved Omega Diamonds only, neither Ehud Arye Laniado, Sylvain Goldberg or Robert Liling were involved in this. The Omega Diamonds tax dispute has been settled in an amicable settlement.”

Michael Gibb of Global Witness told ICIJ that “Diamonds have a long history of being linked to conflict and violence. The ease with which diamonds can be converted into tools of war, when not sourced responsibly, is astonishing.”

Still, the number of diamond industry players who were revealed from the data leak were only a fraction of  100,000 private clients and entities --  celebrities, politicians, arms dealers and offshore shell companies  -- who willingly  hid cash and earnings from tax authorities.

The special report, which can be read here, and diamond-industry specifics here, stated that HSBC engaged in a range of illegal behaviors and repeatedly reassured its clients that the institution would not disclose details of their accounts to authorities. Employees of HSBC also discussed measures that would ultimately allow their clients to avoid paying taxes in their home countries, according to ICIJ. These actions included holding accounts in the name of offshore companies for the purpose of avoiding the European Savings Directive -- a rule aimed at tackling tax evasion through the exchange of bank information. The bank originally insisted that ICIJ destroy the documents, but it stated for the article that it had taken significant steps to reform internally and "exit clients who did not meet strict new HSBC standards, including those where it had concerns in relation to tax compliance." The bank also added that its Swiss private bank has reduced its client base 70 percent since 2007.

ICIJ enlisted more than 140 journalists from 45 countries to review names and create the report, with among nearly 50 media partners in all, including the BBC, The Guardian, 60 Minutes and  Süddeutsche Zeitung. 

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Tags: Banking, fraud, HSBC, Jeff Miller, Money Laundering, swiss, tax evasion
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