Hervé Falciani, self-proclaimed HSBC whistleblower, sentenced in absentia to five years’ jail over biggest leak in banking history

Juliette Garside has the latest development in a case I’ve been covering on this site since 2009 (my earlier coverage is no longer available as the previous incarnation of PogoWasRight.org was not importable into WordPress). The whistleblower who exposed wrongdoing at HSBC’s Swiss private bank has been sentenced to five years in prison by a Swiss court. Hervé Falciani, a former IT worker, was convicted in his absence for the biggest leak in banking history. He is currently living in France, where he sought refuge from Swiss justice, and did not attend the trial. The leak of secret bank account details formed the basis of revelations – by the Guardian, the BBC, Le Monde and other media outlets – which showed that HSBC’s Swiss banking arm turned a blind eye to illegal activities of arms dealers and helped wealthy people evade taxes. Read more on The Guardian.

Falciani court date set over bank data theft charges

SwissInfo.ch reports that a former HSBC employee is closer to standing trial on data theft charges in a case that has had international repercussions: The ex-HSBC employee accused of stealing secret data from Swiss bank accounts is to go on trial in Switzerland in October. Hervé Falciani worked in IT at the bank’s Geneva branch and is alleged to have given information to the French authorities. Falciani faces charges of violating business and banking secrecy, and retrieving unauthorised data. According to the charge sheet from the Federal Prosecutor’s Office, Falciani copied data from his former employer and passed it on to private businesses and the authorities in other countries, including the French tax authorities. Read more on SwissInfo.ch. Some of the previous coverage of this breach and its fallout can be found by searching for “Falciani” on this site.

Ex-HSBC Employee Falciani Said Indicted on Swiss Bank Data Theft

Hugo Miller reports: A former computer technician for HSBC Holdings Plc (HSBA) “celebrated as a hero abroad” was indicted in Switzerland on charges of industrial espionage and violating the country’s bank secrecy laws, prosecutors said. The Swiss Attorney General’s office, without identifying the suspect as is its custom, said in a statement today that the country was prepared to try him in absentia. The statement refers to Herve Falciani, the technician accused of stealing client data in 2008 from HSBC’s Geneva office and passing it to French authorities, said a person with direct knowledge of the case who asked not to be identified. Read more on Bloomberg News.

Swiss Confirm Falciani Arrest in Spain Over HSBC Data Theft

Neil MacLucas of Dow Jones Newswires reports: Switzerland has confirmed the arrest in Spain of Herve Falciani and are now seeking extradition of the Italian-French citizen being sought by police in connection with the theft of customer data from the Geneva branch of HSBC Private Bank. […] Copies of the HSBC data, which lists the names and account details of thousands of customers, is now in the hands of French tax authorities, who are using it to chase alleged tax dodgers with money stashed in Switzerland. Mr. Falciani has denied preliminary allegations by the Swiss authorities of breaching banking secrecy and stealing banking records. His home in France was raided at the behest of Swiss authorities, who had launched a probe into allegations of violations of bank secrecy. HSBC announced in 2009 that data on customers had been stolen in 2006 and 2007 by Mr. Falciani, who had worked at the bank as a computer specialist. Read more on Fox Business. Some of the previous coverage on this case can be found on this blog here.

Court case against former HSBC Private Bank employee adjourned

The Local reports: A trial in Switzerland has been adjourned against Hervé Falciani, the former IT worker from the HSBC Private Bank in Geneva who leaked data about thousands of suspected tax evaders. Falciani, 43, now living in Spain, failed to appear in the Federal Criminal Court in Bellinzona in the canton of Ticino on Monday to defend himself against charges of violating Swiss banking secrecy laws and other offences. Federal prosecutor Carlo Bulletti requested the adjournment in view of Falciani’s non-appearance. The whistle-blower has already said that he would not appear in the court for Monday’s court hearing or at another one set for November 2nd, the ATS news agency reported. Falciani copied data relating to 130,000 suspected tax evaders with hundreds of millions of dollars in accounts at HSBC and since 2009 has been cooperating with various European countries by providing this information to governments. Read more on The Local (CH). It’s interesting how his image has shifted over the years from a rogue insider who stole his employer’s data to try to sell to other governments to a “whistleblower.”  For some of the past coverage of this case on this site, search for “Falciani.”  

How the HSBC whistleblower used the Internet to leak private bank information to the police

Stefano Pozzeban reports: Hervé Falciani, the French-Italian whistleblower who handed over information on 100,000 HSBC client accounts to French authorities in 2009, has published a detailed account on how the transfer of the data actually took place. The IT engineer has published a book, La Cassaforte degli Evasori, which tells his side of the story, writing how he came up with the decision to organise the greatest leak of secret bank details to date. Read more on Business Insider. Note: the “whistleblower” label is Business Insiders’ headline for the story. DataBreaches.net does not necessarily view Falciani as a whistleblower.

HSBC insider breach: Fallout continues for private banking clients and the bank

The HSBC data theft by their former employee Hervé Falciani is finally getting a lot of mainstream media attention here, with 60 Minutes doing a segment on Falciani last night (video). The computer files, which Falciani shopped to a number of governments, reveal that HSBC, one of the largest banks in the world, profited from its private banking arm that did business with “arms dealers who channeled mortar bombs to child soldiers in Africa, bag men for Third World dictators, traffickers in blood diamonds and other international outlaws,” according to the International Consortium of Investigative Journalists. If the leak and its implications are news to you, you haven’t been reading this blog for long, as I’ve been covering this insider breach and its consequences for the bank and tax evaders since 2009.  Searching this blog for “HSBC Falciani” will take you to some of the previous coverage. Or head on over to the International Consortium of Investigative Journalists to take a look at their project on these leaks and their backgrounder on Falciani. The Guardian also running a big piece on the breach and resulting investigations. Expect to see a lot of pieces as individual athletes, politicians, and celebrities make headlines as their attempts to evade taxes get picked up by the media.  But don’t lose sight of the bigger issues. Did HSBC engage in felonious behavior under our laws, and if so, what will happen to the bank? Did HSBC make privacy and data security assurances to its private banking clients that it failed to keep? And when we think about damage from external threats vs. internal threats, how do we calculate the financial damage/injury from this one? While the JPMorgan Chase hack made lots of headlines this summer (and rightfully so), the HSBC breach may stand as one of the worse, if not the worst, breach ever in the financial sector, even though the number affected is not as great as some other breaches.

Hervé lifting

An insider breach previously reported on this blog continues to create problems for bank’s clients who were dodging their taxes. What Edward Snowden is to mass surveillance, Hervé Falciani is becoming to private banking. In 2008 the now 41-year-old native of Monaco walked out of the Geneva branch of HSBC, where he had worked for three years, clutching five CD-ROMs containing data on thousands of account holders. The theft lobbed a bomb into Europe’s private-banking market, spawning raids and tax-evasion investigations continentwide. In the latest, this week, Belgian agents swooped on the homes of 20 HSBC clients, including some with ties to Antwerp diamond dealers. Read more on The Economist.

Court says France cannot use stolen bank data for searches

AFP reports: France’s highest appeals court has ruled that authorities may not use a list of 3,000 people suspected of tax evasion as a basis to conduct searches due to its illicit origin. French authorities in January 2009 acted on a Swiss warrant and seized data about global banking giant HSBC’s customers from former computer specialist Herve Falciani’s home in France. The decryption of the stolen files held by the former HSBC employee had allowed for the identification of 127,000 accounts belonging to 79,000 people, officials said at the time. French authorities then used the information to launch tax evasion probes into individuals, including searches of homes to find evidence. Read more on Expatica.com

UPDATE: France agrees to hand back ‘stolen’ Swiss bank data

From the Agence France-Presse: France said Monday it would agree to a Swiss request to hand back data taken from a HSBC bank branch in Geneva that is at the centre of a row between the two countries. France said Monday it would agree to a Swiss request to hand back data taken from a HSBC bank branch in Geneva that is at the centre of a row between the two countries. HSBC Private Bank says the information was stolen by a former employee who later gave it to French authorities probing suspected tax evasion by several thousand French taxpayers. The Swiss authorities had called on France to hand it back after it was seized in January by police in southern France under a Swiss warrant for the former employee, a French citizen identified as Herve Falciani. Read more on MSN.