A man charged with conspiracy to conceal offshore bank accounts pled guilty this week to offshore tax evasion. This particular defendant had accounts concealed in India with banking giant HSBC.
The man who was in court is a native of India, who became a naturalized U.S. citizen in 2006. The indictment said that five bankers working in England for HSBC Holdings were co-conspirators.
U.S. prosecutors have claimed that there is an HSBC unit in India that has possibly helped thousands of Americans in dodging taxes.
The government is requesting authority to serve a “John Doe” summons on HSBC to obtain the names of American account holders who are using accounts in India to evade taxes.
The American government claims that HSBC has been soliciting clients of Indian origin living outside India since at least 2002, through a unit called NRI Services Division.
Orange County tax attorneys note that the use of a “John Doe” summons was recently used in the government’s case against Swiss banking giant UBS AG. UBS ultimately settled government charges against it by paying $780 million and agreeing to hand over nearly 5,000 client names to the Justice Department.
Some observers suspect that HSBC will put up less resistance than UBS did, because UBS was protected by Swiss banking secrecy laws.
HSBC appears to be a casualty of the IRS’s amnesty program, which yielded information on thousands of hidden offshore bank accounts.
Source: Reuters “HSBC U.S. client pleads guilty to offshore tax dodge” 4/12/2011