Monday, February 9, 2015

Al Taubman linked to enormous leak of HSBC files

Posted By on Mon, Feb 9, 2015 at 12:44 PM

Billionaire mall mogul Al Taubman has been linked to a cache of files from banking giant HSBC that illustrate how the company's Swiss arm helped wealthy customers dodge taxes and conceal millions of dollars in assets

The revelation follows an enormous leak of HSBC records, obtained by the French newspaper Le Monde, which in turn shared the documents with the International Consortium of Investigative Journalists (ICIJ). As the ICIJ puts it, "They provide a rare glimpse inside the super-secret Swiss banking system — one the public has never seen before." 

According to one of the partners on the ICIJ project, London's Guardian newspaper, the documents on some 30,000 accounts that hold $120 billion in assets show HSBC:

• Routinely allowed clients to withdraw bricks of cash, often in foreign currencies of little use in Switzerland.

• Aggressively marketed schemes likely to enable wealthy clients to avoid European taxes.

• Colluded with some clients to conceal undeclared “black” accounts from their domestic tax authorities.

• Provided accounts to international criminals, corrupt businessmen and other high-risk individuals.

ICIJ stressed that it's "not illegal in most countries to maintain offshore bank accounts, and being identified as Holding an HSBC Private Bank account is of itself no indication of any wrongdoing. Some who are named the files may have had some connection to a Swiss bank account, such as a power of attorney, while not owning the money in the account, or owning only a share of it. Others in the files may not even have had a Swiss bank account."

(For example, ICIJ noted, a representative for John Malkovich said he knew "nothing about an account listing his name" and suggested it might be related to Bernie Madoff, the former stockbroker who was convicted of fraud on a widespread scale "and handled some of [Malkovich's] finances.")

But the consortium noted its investigation does illustrate questionable behavior, "such as banker advising clients on how to take a range of measures to avoid paying taxes in their home countries — and customers telling bankers that their accounts are not declared to the government."

The reporting, ICIJ said, goes beyond what was revealed in a 2012 U.S. Senate investigation that showed HSBC allowed "Latin drug cartels to launder hundreds of millions of ill-gotten dollars through its U.S. operations, rendering the dirty money usable." HSBC paid nearly $2 billion in 2012 to settle a federal criminal and civil investigation. 

Taubman was selected by ICIJ as one of 61 individuals as a sample "based on their public interest" — the cache of 60,000 files revealed details of over 100,000 clients of HSBC. Six accounts were identified by ICIJ as being connected with Taubman's name. 

According to ICIJ, Taubman was listed as the beneficial owner of four of the accounts, all of which were closed by 2007. "One of the client accounts opened in 1998 ... listed one bank account, and held as much as $13,706 in 2006/2007," ICIJ reported. (The trove or records cover the period of 2005-2007.) 

A Taubman representative, Christopher Tennyson, told the consortium, "that those accounts were held by the Athena Group, a real estate company in which Taubman was an investor." The accounts supported development projects in Russia, Tennyson said. 

Taubman — who has made sizable donations to the University of Michigan, Lawrence Technological University, and the College for Creative Studies, and formerly owned the Sotheby's auction house — was sentenced in 2002 to 10 months in prison for fixing auction prices

There's much to unpack related to the HSBC leak, so if you're interested in reading up on it, check out The Guardian's package here, or watch last night's 60 Minutes investigation on it below.

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