A quarter of Argentines with undeclared accounts in Switzerland also have local funds
The Financial Information Unit (UIF) yesterday presented evidence that it said showed HSBC’s supposed illegal scheme to help Argentines evade taxes and of the close ties between the bank’s local branch and its Swiss branch.
The revelations were made at a new hearing of the bicameral congressional commission in charge of investigating the scheme.
A quarter of the 4,040 Argentines citizens and companies who are suspected of having undeclared banks accounts in HSBC’s Swiss branch also have or had an account in HSBC Argentina, according to information gathered by the commission over the past few weeks. A total 707 active accounts and 455 inactive accounts were found in the bank’s local branch, totaling 1,162 accounts.
“The bank was founded to launder money from opium and that origin has a clear influence now. The bank’s mission is to launder money and anybody who wants to do that knows this is the place to do it,” UIF head José Sbatella said. “It’s the bank with the most investigations open and already has had to pay 100 million pesos. They are constantly breaking the law and choose to work in the shadows.”
Sbatella attended the commission hearing alongside other UIF officials, who described with plenty of details how HSBC repeatedly broke the law. The bank’s local branch shares the same address with the HSBC’s Swiss branch representation in the country, whose leading official had also a job at HSBC Argentina. At the same time, UIF is investigating the origin of the undeclared funds in Switzerland, which could be linked to drug trafficking or human trafficking
“The bank describes itself to its potential clients as an economic group that helps them to launder money. All of the areas of the bank are marketed together. But when they issue reports to the state, everything is done separately,” UIF’s Analysis Director Federico de Negri said. “Many of the clients of the bank in Argentina also have money in Switzerland, even its officials. They used the dollar for tourism scheme as a way to take money abroad.”
UIF’s Inspections Director Germán Clemente recalled that since 2011 five inspections were carried out on the bank, finding many irregularities each time such as breaches in its computer system. No progress was made by HSBC after any of the inspection and that they failed to report suspicious transactions done by its clients, Clemente said. Three fines were issued to the bank because it failed to report large transactions that didn’t match with client’s profiles, either individuals or companies.
“We were able to see the systematic failure of HSBC to prevent money laundering. After every inspection, the bank reported changes that said it improved the irregularities but when looking closely at the supposed improvements all remained the same. Failures continue to be there,” Clemente said. “Not all of the foreign trade transactions were analyzed by the bank and the client’s profiles were poorly done.”
Sbatella points at Martino
HSBC Argentina head Gerardo Martino called into question by Sbatella, who said the official was brought in from Mexico after many irregularities there in order to increase the money laundering actions in Argentina. Meanwhile, commission chair Roberto Feletti accused him of being “almost” the one responsible for the deaths of the 10 firemen at the Iron Mountain warehouse fire, where HSBC and other banks store information.
“Martino used to be the treasurer of HSBC’s Mexican branch and was promoted as the head of the Argentine branch because he has family here. But behind the promotion was the bank’s objective to increase money laundering in Argentina,” Sbatella said. “The bank paid a fine in Mexico for irregularities and sent Martino here. It does the same all around the world, not follow the rules and then pay a fine.”
Following the same train of thought, Clemente said UIF asked the bank for information on some clients as part of its inspections but the bank failed to provide the data, saying it had been burnt in the Iron Mountain. That doesn’t match up with what Martino said when attending the commission, as he made assurances that there was a backup of all the information that used to be in the warehouse
“That excuse obstructed our investigation as we had to wait a long time before we could get hold of that information. The bank first said all the files had been burnt but them some of them were found,” Clemente said.
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