Irish names in HSBC bank’s secret files

International clients include those involved in arms trade and blood diamondsA huge cache of secret files from the Swiss branch of one of the world’s largest banks includes Irish people who made tax settlements with the Revenue Commissioners for more than €4.5 million. Other clients include arms dealers who sold munitions to African child soldiers, traffickers in blood diamonds, and associates of third world dictators.

The files, which cover accounts with HSBC Private Bank in Geneva holding more than $100 billion, have led to investigations around the globe resulting in massive tax settlements. They were given to the Revenue Commissioners by the French authorities in June 2010 and have now been seen by The Irish Times.

Since 2010, the information has led to 20 tax settlements here for a total of more than €4.5 million, and to three successful prosecutions for tax offences, with a fourth case pending.

However in contrast to the authorities in France, Belgium and Argentina, the Revenue Commissioners decided that there was not enough evidence in the files to justify a case being taken against HSBC Private Bank, Geneva, on charges of aiding and abetting tax evasion.

There is nothing illegal about having a Swiss bank account and Irish clients on the list include a number of well-know business people and Dublin-based investment funds. But there are also Irish people who made confidential settlements with the Revenue as part of a scheme targetting offshore deposits in 2004 and others who made settlements since the data came into the possession of the Revenue Commissioners.

The files were obtained by the International Consortium of Investigative Journalists (ICIJ) in Washington DC, via the French newspaper, Le Monde. The Irish Times is working in partnership with 45 other media organisations and the ICIJ, in producing reports based on the files.

London-listed HSBC, which reports multi-billion euro profits every quarter, has issued a lengthy statement to The Irish Times and the other media groups involved in the Swiss Leaks project, admitting that standards were not as they should have been in HSBC Geneva, but claiming that new management is working to improve the culture in the Swiss bank.

It said an “intensive de-risking exercise” has seen deposits fall almost by half, to $68 billion at the end of last year, from $118.4 billion in 2007.

The bank files were copied by a former employee, Hervé Falciani, during 2006 and 2007, and were seized during a raid by the French police on his father’s home in 2009. Mr Falciani was charged late last year in Switzerland with industrial espionage and violating bank secrecy and the Attorney General’s office there said it was prepared to try him in absentia.

As well as names, addresses, balances and other information, the files also contain notes of contacts with bank customers. In the case of Irish businessman John Cashell (59), of Cashell Radley Business Systems, Tralee, Co Kerry, a note on his file records how he called the bank from Spain in 2005 to express his concerns about the European Savings Directive (ESD), which was introduced that year. The directive provides for the exchange of banking information between EU member states, and for the application of a withholding tax on interest payments to EU citizens by banks in Switzerland.

“Once again his pre-occupation is with the risk of disclosure to the Irish authorities,” the note said. “Once again I have endeavoured to reassure him that there is no risk of that happening. He mentioned that there had been some high profile cases in Ireland recently that had put everyone on edge.”

Mr Cashell pleaded guilty to three counts of filing incorrect income tax returns in the Circuit Court, Tralee, last year, and was fined €25,000. He has also made a €102,000 tax settlement, of which €29,000 was tax and the rest interest and penalties. He declined to comment when contacted.

Another former HSBC Geneva account holder, Galway economist Dr Michael Cuddy (72), said that a bank official suggested to him at one stage that he put his money into an offshore trust. He said he never took up the suggestion. The European Commission last year amended the ESD to prevent people using offshore entities to circumvent the objectives of the directive.

French economist Thomas Piketty, author of Capital in the Twenty-First Century, told the ICIJ that the offshore industry is a major threat to democratic institutions and the social contract.

“Financial opacity is one of the key drivers of rising global equality. It allows a large fraction of top income and top wealth groups to pay negligible tax rates, while the rest of us pay large taxes in order to finance the public goods and services… that are indispensable for the development process.”

Figures given to The Irish Times by the Revenue show that the amount of money Irish citizens have on deposit in Switzerland is much greater than is the case with other secretive locations such as Jersey, Monaco, or Luxembourg.