A US surgeon pleaded guilty today to using a Swiss bank account to hide assets from the US. HSBC, Europe's largest bank, was the guilty culprit here, along with Dr. Silva, a head and neck surgeon from virginia. See Voreacos and O'Reilly, Surgeon Admits Conspiring to Hide HSBC Cash from IRS, Bloomberg.com/BusinessWeek, Feb. 16, 2010.
This story reads like the other recent offshore accounts cases that have come to light. A man with plenty of money and plenty of skill for earning more who still tries to cheat the government of its due--blatantly discussing with his Swiss banker and attorney how to maintain the secrecy of the funds inherited from his mother, arranging to smuggle in "bricks" of cash by mailing 26 separate envelopes each with under $10,000 to ostensibly avoid the reporting requirements, lying to customs officials. All in all, the man went to considerable lengths to avoid paying tax on money that he did nothing to earn, that just fell into his lap when his mother died.
Perhaps even worse, the bank's employees were clearly acting as eager aiders of that behavior. Don't do anything to reveal it--keep it "hush hush" they told him. They facilitated the smuggling by providing bills in amounts that could be broken up, advising him not to transmit funds electronically. They essentially advised him on tax cheating.
Now here's the final straw:
HSBC Chairman Stephen Green, appearing in Washington today at the Brookings Institution to promote his new book, “Good Value: Reflections on Money, Morality and an Uncertain World,” declined to take questions from reporters.
Good values? Morality? With an agent so blatantly abetting tax evasion, can one really think that the CEO of HSBC wasn't aware of the money the bank was making by helping its clients hide their funds abroad? I suppose it's possible, but it seems unlikely. I wonder how many other leads the IRS has to HSBC in the fourteen thousand or so voluntary disclosures it received. One suspects that those leads will now be followed up, to see where they lead.
SAnd if banks are going to have the ability now to enter into political campaigns because of the Court's new view of what constitutes free speech rights--when they aren't persons, can't vote, and can use their huge size and vast koffers to influence the laws in their favor--then one option for how to deal with them is to treat them also as if they are equally punishable for their crimes. The government could consider the activities of the agents of HSBC and bring the corporation to trial for aiding tax evasion and fraud (and smuggling and whatever other crimes were facilitated). A possible beneficial by product of vigorous criminal enforcement of the law against corporations is that monolithic Big Banks, Big INsurance and Big Pharma might be broken up for their involvement in money laundering, offshore tax evasion, price rigging, and similar activities.
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