HSBC fraud charges

A Swiss-based subsidiary of British banking giant HSBC was in the dock on Monday after Belgian prosecutors charged it with widespread tax fraud, criminal behavior and money laundering by helping rich clients avoid taxes.

In a statement, prosecutors said the actions of HSBC Private Bank in Geneva cost Belgium hundreds of millions of euros in lost tax revenue over the past decade by concealing the assets of "wealthy clients, in particular from the Antwerp diamond industry."

But they added that the sums could be much higher, including amounts that may have been laundered.

The bank is also suspected of "knowingly promoting and encouraging fiscal fraud by providing its privileged clients with access to offshore accounts, mostly located in Panama and the Virgin Islands" with the sole purpose of concealing client assets, the statement added.

The alleged fraud began in 2003 to circumvent that year's European Union Savings Directive, which required EU member states to share information on interest paid to allow it to be taxed in the taxpayer's country of residence.

The investigation comes five months after the CEO of UBS's Belgian unit, Marcel Brühwiler, was charged with money laundering and criminal organization in connection with investigations into alleged money laundering by the bank.

sgb/cjc (Reuters, AFP)