Attestation Update – A&A for CPAs

Technical stuff for CPAs providing attestation services

HSBC helped assorted bad guys hide their money

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Not much new reporting in the last week or so on HSBC. There has been a huge amount of political blowback in Europe, especially England. I’m not going into that turmoil.

Irony alert: last article I’ll mention suggests that money laundering may now be illegal in Switzerland, land of the numbered bank account.

Here is the last of the major Guardian articles:

2/12 – The Guardian – HSBC files: Swiss bank hid money for suspected criminals – Part 5. Depressing read.

Alleged crooks HSBC dealt with:

  • Senior government officials under investigation, some mentioned were subsequently charged/convicted
  • Alleged blood diamond merchants
  • Alleged looters of banks in Eastern Europe
  • Arms dealers
  • Drug smugglers
  • Sport doping doctor

Best line is about the HSBC’s admitted dealings with druggies in Mexico, for which it paid a $1.9B fine because of moving $7B cash across the US border:

The bank even widened the windows at some of its branches so that larger boxes of money could fit through. The bank’s “stunning failures of oversight”, the US Department of Justice said, “caused it to be the preferred financial institution for drug cartels and money launderers.”

A depressing low of what it means to be a full-service banker: bring in carpenters to resize the windows in the branch to handle the per-transaction volume of drug money.

How’s this for a depressing advertisement for your business: We are the bank recommended by drug cartels everywhere.

2/7 – The Economist – Follow the money – Lots of countries are bringing more pressure to bear on tax evasion. More countries are moving to share more information.  Options on where to hide money are shrinking a bit.

2/9 – Independent – HSBC tax leaks: The 5 key questions you need to ask about the biggest banking leak in history – Good general background.

2/18 – The Guardian – HSBC: Swiss bank search as officials launch money-laundering probe – Reporting on the bank led the Swiss prosecutors to start an investigation. Article quotes the topic of investigation as

“suspected aggravated money laundering”

I don’t know if that phrasing has special meaning in Switzerland, but it is a nice description.

Hints dropped to the reporter say the investigation could expand to individuals. When I read comments like that, I wonder if it is just a line thrown out to reporters to make law enforcement sources look good. See how great we are? We might actually start thinking about maybe doing something that reporters will say looks serious.

On the other hand, there is absolutely no way they can say, Yeah, we have a list of specific targets that we’re gonna indict as soon as we check to see if we can find any last pieces of minor evidence to support a couple dozen charges we are currently debating how to wordsmith.

Wait just one second.

Switzerland…

Numbered accounts…

Switzerland…

Hey, hasn’t ‘aggravated money laundering’ been the Swiss banking sector’s business model for the last 100 years?

Written by Jim Ulvog

February 18, 2015, 8:37 am at 8:37 am

Posted in Other stuff

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