BRUSSELS – A Belgian investigating judge has charged a Swiss private banking branch of HSBC with massive organized fiscal fraud, money laundering and forming a criminal organization to the benefit of over 1,000 wealthy clients that cost the Belgian authorities “hundreds of millions of euros.”
The prosecutor’s office said Monday the accusations against HSBC Private Bank NV/SA are based on its involvement over the years with “wealthy clients, specifically from the Antwerp diamond industry.” It said the justice ministry is also looking into possible money laundering.
In August, HSBC Holdings PLC said it knew inquiries were ongoing and that the penalties “could be significant.” On Monday, it said it had been notified of the formal investigation by the Belgian judge. It said it was also being investigated by French authorities.
HSBC, Europe’s largest bank by market value, has had similar problems in recent years. Two years ago, it agreed to pay a $1.9 billion fine in the U.S. to settle a money-laundering probe. It faced accusations it transferred funds through the U.S. from Mexican drug cartels and on behalf of nations such as Iran that are under international sanctions.
The Belgian prosecutor’s office said that in its case the private banking branch is suspected of “promoting and encouraging fiscal fraud” by putting offshore companies in Panama and the Virgin Islands at the disposal of clients. It said the companies had no other purpose than to hide its clients’ assets.
It said the events under scrutiny range from 2003 until now. It said the total sums involved could amount to “several billions of dollars.”
The investigating judge will be calling on several leading officials and staff for questioning. The bank said it “will continue to co-operate to the fullest extent possible.”