HSBC's private banking arm under investigation for fraud

 
Emma Haslett
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The bank's private arm faces charges of helping "over 1,000" clients dodge tax (Source: Getty)

The private banking arm of HSBC has been put under investigation for fraud, including money launcdering, criminal organisation and acting as an illegal financial intermediary, by Belgian investigators.

The Brussels prosecutors' office said the private bank, which is based in Switzerland, had helped "over 1,000" clients "dodge" tax worth "several billions of dollars".

[The bank] knowingly eased and promoted fiscal fraud by making offshore companies available to certain privileged clients.

The allegations include "encouraging" fraud by selling companies based in the Virgin Islands and Panama to help clients avoid European rules on savings.

HSBC's private bank is already under investigation by France and the US over allegations of tax avoidance by its clients, although it hasn't been charged in the French case. However, it isn't the only bank under investigation: Marcel Bruehwiler, the chief executive of UBS' Belgium unit, was charged with fraud in June.

In a statement today, HSBC said:

HSBC Private Bank has been notified that it has been placed under formal investigation by a Belgian judge who, along with the French authorities, is examining whether the bank acted appropriately in the past in relation to certain clients who had Belgian tax reporting requirements. Both the Belgian and French investigations have been notified in our filings previously and we will continue to cooperate to the fullest extent possible.

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