A former chief executive of HSBC’s Swiss unit has pleaded guilty to helping wealthy clients hide at least €1.6 million.
AFP recently reported that Peter Braunwalder was fined $560,000 and received a one-year suspended sentence in France for his role in helping HSBC’s clients stash their cash.
The Swiss Leaks scandal, exposed by the International Consortium of Investigative Journalists, revealed how over €600 million was kept by Maltese account holders in HSBC’s Geneva branch. Among the high-profile local clients were former Nationalist ministers Ninu Zammit and Michael Falzon.
Mr Zammit had hid $3.2 million in his account while Mr Falzon secreted away €465,000.
Both men had kept their Swiss accounts hidden while in government, failing to declare the holdings in annual ministerial asset declarations.
Back in 2015, when the scandal first broke, Prime Minister Joseph Muscat had vowed to come down hard on anyone who hid their money overseas.
Dr Muscat had also said the government would publish a list of all politically-exposed account holders found on the Swiss Leaks list. It would later emerge that his chief of staff, Keith Schembri, had his own Swiss account, albeit with a different bank, Credit Suisse.
Last year, Finance Minister Edward Scicluna told Parliament that contrary to the Prime Minister’s pledge, the Swiss Leaks list could not be published.
A total of €12 million in lost tax revenues was recovered by the Maltese tax authorities thanks to the data leak.
As part of a government crackdown on financial crime, Prof. Scicluna has vowed to start prosecuting tax evaders.
At the moment, those caught evading tax are merely subject to an administrative penalty.
The Financial Action Task Force, an intergovernmental body geared towards fighting financial crime, considers tax evasion to be a predicate offence for money-laundering.
Tax evasion is considered a predicate offence as people failing to declare vast amounts of income locally will often have to launder the money to re-introduce it into the financial system by disguising its origins.
In the past, both Nationalist and Labour government have offered tax amnesties for people with funds squirreled away in foreign jurisdictions.
Both Mr Zammit and Mr Falzon have benefitted from such amnesties.
A number of financial services providers have been fined by the Financial Intelligence Analysis Unit over the years for failing to properly establish where the money their clients repatriated under the 2014 government amnesty came from.