HSBC leaker Falciani detained in Spain at demand of Switzerland

Herve Falciani, the former HSBC employee whose disclosures uncorked the "Swissleaks" scandal on bank-supported tax evasion, has been detained in Spain
AFP

Madrid (AFP) – Spanish police on Wednesday detained Herve Falciani, a former computer analyst at the Swiss branch of HSBC who leaked documents alleging the bank helped clients evade millions of dollars in taxes, a police source said.

“He was arrested in Madrid, in the street on the way to a conference,” a top police official told AFP, adding the arrest was made at the request of Switzerland, which is seeking his extradition.

The official did not say why Falciani, a French-Italian national, was wanted by Switzerland.

A Swiss court in 2015 convicted Falciani of aggravated industrial espionage and handed him a five-year prison sentence.

He did not attend his trial and has avoided Switzerland since.

Falciani leaked a cache of documents allegedly indicating that HSBC’s Swiss private banking arm helped more than 120,000 clients to hide 180.6 billion euros ($222 billion) from tax authorities, sparking the so-called “Swissleaks” scandal.

While he is widely viewed as a whistleblower and hailed as a hero in countries where his leaked information is helping catch tax cheats, Swiss authorities prosecuted him for data theft, industrial espionage, and violating the country’s long-cherished banking secrecy laws.

“It is very regrettable that he was arrested, we don’t understand it,” the president of Spain’s tax inspectors union Gestha, Carlos Cruzado, told AFP, adding he witnessed Falciani’s detention as he arrived at a university to speak at a conference.

“The paradox is that he was detained at the entrance to a debate on the need to protect whistleblowers and his chair was left empty. We were going to debate the fact that Spain is one of the European countries where fewer measures have been implemented to protect whistleblowers,” Cruzado said.

– ‘Snowden of tax evasion’ –

Falciani became an IT worker for HSBC in 2000 and moved to the bank’s offices in Geneva in 2006.

The so-called “Snowden of tax evasion” and “the man who terrifies the rich” then obtained access to a massive database of encrypted customer information.

He took the client list in 2007 and went to Lebanon with his mistress the next year planning to sell the data. Swiss authorities described it as “cashing in”.

Yet suspicious bankers in Lebanon were not interested in buying the dubiously sourced client list and at least one tipped off their Swiss counterparts to Falciani’s activities. 

Falciani then got in contact with European fiscal authorities and began passing them the pilfered information, which subsequently led to the prosecution of tax evaders including Arlette Ricci, heir to France’s Nina Ricci perfume empire, and the pursuit of Emilio Botin, the late chairman of the Spanish bank Santander.

He rejects that he was only seeking financial gain, insisting he had wanted to expose how banks support tax evasion and money laundering.

– Flight to Spain –

Falciani, 46, was arrested in Barcelona in July 2012 on an international warrant seeking his extradition to Switzerland after he arrived by boat from the port of Sete in France.

He then spent a couple of months in a Spanish prison. 

In 2013, Spain’s High Court ruled against extraditing Falciani on the grounds that the charges he faced in Switzerland are not considered crimes under Spanish law.

In an interview with top-selling Spanish daily El Pais in 2013, Falciani said that about a month before he fled to Spain, US justice officials who he was collaborating with from Paris warned him his life was at risk.

“I had two options: start a new life in the United States or travel somewhere else to gain time. They told me that the only safe place in Europe would be Spain, which had used my information with success in important cases,” he told the newspaper.

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