Herve Falciano recounted a saga of life in a thriller to Nice Matin newspaper but there is little evidence to back the story
Geneva, Switzerland (GenevaLunch) - Europe’s largest bank made a startling confession, accompanied by an apology, to its clients 11 March: Britain’s HSBC said it had been given evidence by the Swiss Federal Prosecutor that a Geneva office employee stole data linked to 24,000 client accounts and tried to sell the information abroad. The employee, Hervé Falciani, had tried to flog that data to Lebanon in 2008. His failed attempt was the start of the unraveling of his theft scheme. Evidence of efforts by Falciani and a female companion for the first time linked his name to the theft, which the Swiss government had been investigating for several weeks.
Human factor is the real risk for an international company with secrets
It also drew attention to a significant problem for international companies that have any private data, from client information to research and development data: It takes a human being to steal for personal gain, so knowing staff well is as critical to security as a good IT system. Laws inside a country may protect corporate secrets and privacy, but once international boundaries are crossed the issue of countries not extraditing their own citizens can become an issue.
Thief, spy saga victim or honest whistleblower: Falciani’s many faces
Falciani’s theft covered several months but it is not yet clear how he did it
[correction 13 March] Geneva, Switzerland (GenevaLunch) - The extraordinary under-assessment by HSBC of the number of bank accounts implicated in the theft of data from Geneva begins to make more sense when the timeline the bank provided to the press Thursday 11 March is studied. French authorities and then Swiss have been privy to the data for months, but the bank says its first credible clue about the scope of the theft came only one week ago, 3 March.
Hervé Falciani stole data linked to accounts of some 24,000 clients in Geneva, some 15,000 of whom are still clients, but the bank initially said only 10 accounts were involved. How he did it is still unclear and is under investigation by the Swiss Federal Prosecutor’s office. Falciani is in hiding in France: France, like many countries including Switzerland, does not extradite its own citizens, which puts him out of the reach of Swiss investigators.
Timeline provided by HSBC
Background, GenevaLunch
Geneva, Switzerland (GenevaLunch) – HSBC, Europe’s largest bank, cleared up some of the confusion that has surrounded the 2008 theft of client data from its Geneva bank and apologized to its current customers at a press conference in Geneva Thursday morning 11 March. A total of 15,000 current clients, slightly less than one-fifth of its customer base of 100,000 clients in Switzerland, were affected when French employee Hervé Falciani, an IT employee, stole data over a period of several months during 2006-08, the bank acknowledged. It noted that the extent of the theft was shown to it only 3 March, a week ago, when the Swiss Federal Prosecutor gave it copies of “a substantal portion” of the stolen data. HSBC says it is now “actively contacting” clients to apologize.
Data was also stolen on additional 9,000 clients’ who have left the bank, bringing to 24,000 the total number touched by the theft. Many of those who left did not have large enough amounts to warrant a wealth management account.
Alexandria, Virginia, USA (GenevaLunch) - A doctor based in Virginia in the US pleaded guilty Tuesday 16 February to conspiracy to evade taxes. This is reportedly the first IRS (US tax authority) case where a non-US bank other than Switzerland’s UBS is cited as providing advice about how to evade taxes.
German local government confirms new stolen data offered, Swiss president confirms Germany bought first batch
Swiss politician might consider reconsidering Swiss banking secrecy, some hint
Bern, Switzerland (GenevaLunch) – The saga of data stolen from Swiss banks and offered to the German government continues, with new wrinkles to the story. A German newspaper will publish an article Saturday, reports Swiss television TSR, stating that a new batch of stolen data, with 2,000 client names, is being offered to a regional German government. The government of Bade-Wurtemberg has confirmed the information.
Meanwhile, Swiss President Doris Leuthard told reporters as she came out of a meeting that Switzerland will likely ask for a copy of the first batch of stolen data. Switzerland did the same with data stolen from a Geneva branch of British bank HSBC and sold to the French government. The data will allow Switzerland to see if requests for judicial assistance from France, and perhaps now from Germany, are based on information obtained from the stolen files. If this is the case, Switzerland will refuse to provide assistance because of the illegal source of the information.
Switzerland and Germany have confirmed this week that they are slowly, steadily continuing to negotiate a new bilateral double taxation agreement.
One of the results of this, according to Le Temps newspaper, is that the question of the viability of Swiss banking secrecy is no longer a taboo political issue.
Thieves to be prosecuted once identity known
Doris Leuthard, Swiss president, meets Nicolas Sarkozy, French president at the World Economic Forum (photo ©2010 WEF and swissimage.ch)
Davos, Switzerland (GenevaLunch) – Swiss Finance Minister Hans-Rudolf Merz told reporters in Davos late Wednesday 27 January that a French-Swiss crisis over stolen bank data is now over, and the bilateral double taxation agreement that was put on hold by Switzerland in December is nearly back on track.
Rumours have been swirling in the past few days, suggesting that France and Switzerland had found a way out of a diplomatic struggle over stolen bank data, which French officials appeared to confirm.
Merz’s comments came at the end of a meeting with his French counterpart, Eric Worth, on the fringes of the World Economic Forum. The two met alone after a brief meeting with the presidents of their countries, Doris Leuthard and Nicolas Sarkozy.
The agreement covers three issues:
Zurich, home to banking thrillers
Zurich, Switzerland (GenevaLunch) – Call them whistleblowers if you believe their consciences have overcome them, or thieves if you think they’ve broken the law. Whatever the label, people who take client data from Swiss banks that employ them, then offer the information to another government, are suddenly back in the headlines.
French officials told Swiss news agency ATS Thursday evening 21 January that France has handed back to Switzerland data stolen by a French citizen. It made the announcement a day after the Swiss Finance Department said it would not provide administrative assistance to countries in cases where stolen information was used. France told ATS it has kept copies of some of the information, for its own investigations.
The data was stolen from British bank HSBC in Geneva, by Frenchman Hervé Falciani. The case came into the public spotlight late in 2009.
Switzerland is reviewing its legislation with an eye to setting clearer limits for handing over data to a treaty partner when it demands assistance in suspected tax fraud cases.
US newspaper says whistleblowers “chipping away” at bank secrecy
Falciani was not the first bank employee to pocket data. American Bradley Birkenfeld stole UBS client data in 2008 and gave it to the US tax authority, the IRS in a case that has had a major impact on the bank’s reputation and which badly strained US-Swiss relations.
To believe the New York Times 19 January, Swiss Rudolf M Elmer has just become the first whistleblower of 2010, a man who “is chipping away at the centuries-old traditions of Swiss banking secrecy,” in line with Falciani and Birkenfeld.
Bern, Switzerland (GenevaLunch) -The latest twist in the increasingly tangled tale of client data stolen from HSBC in Geneva comes from the thief himself, formerly known as Hervé Falciani. The former HSBC computer system employee who now lives under a new identity in the south of France told French journalists from Nice Matin that in August 2008 he was kidnapped by two men in a van in Geneva’s Champel district. The men were of unclear Middle Eastern origin, perhaps Israeli, says Falciani, who accuses his Lebanese girlfriend at the time of being part of a plot to discredit him.
The Lebanese link has surfaced following accusations by Switzerland that Falciani was trying to sell the names and other information about bank clients, which he acknowledges he stole, to several governments, notably Lebanon.
HSBC victim of data theft
Update 21:15 (last paragraph) Bern, Switzerland (GenevaLunch) – The French authorities have responded favourably to Switzerland’s demand to return the data stolen by a former employee of HSBC Private Bank in Geneva, reportedly amounting to 130,000 client names. French Ministry of Justice officials confirmed that the stolen laptop was to be returned “very quickly”.
The encrypted client data, taken from the bank by former IT employee Hervé Falciani, was turned over to the French public prosecutor’s office in Nice, where investigations were opened into French clients of the bank suspected of money-laundering. Switzerland had asked the French authorities for judicial assistance earlier this year when Falciani was found to have stolen the data and moved to France. As part of the cross-border cooperation, Swiss authorities supplied the French with the means to decipher the data on the laptop.
Hans-Rudolf Merz
Update 18:00 Bern, Switzerland (GenevaLunch) – France says it did not break any French laws in accepting stolen data from a Swiss branch of HSBC, and right-wing politicians in Paris called for Switzerland to be put onto an OECD black list of tax havens if the Swiss refuse to ratify a pending treaty with France over the theft. Switzerland says that France, in failing to provide judicial assistance in the matter, is not respecting the terms or spirit of the treaty.
The Swiss government late Wednesday 16 December said it intends to suspend the ratification of the new double taxation treaty with France. The news followed comments to the media by France’s budget minister, Eric Woerth, that he plans to start judicial proceedings based on information stolen from the Geneva branch of HSBC.
Swiss President Hans-Rudolf Merz says that he is asking the Swiss commission in charge of the ratification process, scheduled to meet in February, to hold off until the circumstances surrounding the theft, which took place in Switzerland, are clearer. The French citizen who stole the data has come forward publicly, and he is now being given a new identity in the south of France.
At issue for the Swiss: France has not responded to Switzrland’s repeated requests for judicial assistance, and no information has been provided about the stolen data. The theft, which started in July 2008 by an IT employee at the bank, is illegal under Swiss law. “In a state of law, this type of theft is unacceptable,” Merz told media Wednesday.
Geneva, Switzerland (GenevaLunch) – The French public prosecutor in Nice, southern France, Eric de Montgolfier, has revealed that his office is in possession of confidential details of up to 130,000 clients from HSBC’s private banking branch in Geneva. The data was acquired by the French state when Hervé Falciani, a former IT employee of the bank, left HSBC with the details stored on his laptop. Journal de Dimanche reports that 3,000 of the bank’s clients are French citizens.
The whistleblower, who is reported to have received a new identity and is said to be in hiding in fear of his life, told French public television that he acted out of idealism: “Either you bury your head in the sand or you try to do something about it.”
Only by prescription in South Korea © 2009 F. Hoffmann-La Roche Ltd
Basel, Switzerland (GenevaLunch) – Swiss drug giant Roche confirmed Friday, 6 November, it was under investigation by the South Korean Food and Drug Administration (FDA) for illegally helping British bank HSBC and other companies in South Korea to acquire the drug tamiflu. The FDA raided the local offices of Roche 4 November and seized documents and computer files. It is illegal to purchase tamiflu in South Korea without a medical prescription.
The growing number of companies, organizations and individuals hit hard and even completely wiped out by the massive fraud perpetrated by Bernard Madoff includes several charities, notably in the US, reports Reuters. HSBC became the latest bank to say it may have lost large sums to Madoff.
Switzerland (GenevaLunch, Fre) – UBS bank shares are on a roller-coaster ride, falling by more than 4% during trading Monday morning on rumours that the bank intends to sell its American subsidiary, Paine Webber. Newspaper 24 Heures quotes an analyst as saying that the rumours could be an indication that the bank has new problems. A week ago UBS shares rose abruptly amid rumours that HSBC was considering a takeover but the price has now slipped back to the pre-HSBC rumour level, at 21.7 at 14:20.
