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Belgian Court to Decide if BBI is Obliged to Show Evidence in $1B Tax Evasion Case

Sep 7, 2011 1:18 PM   By Marc Goldstein
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RAPAPORT... The Belgian newspaper Le Soir called a  hidden asset scheme ''one of the most important fiscal fraud files in the country'' as reporters claimed that some 800 Belgian citizens, including many Antwerp-based diamantaires,   had been transferring funds to the Swiss subsidiary of HSBC bank -- unbeknownst to the Belgian fiscal authorities. It was estimated this scheme involved nearly $1 billion (EUR 700 million) worth of assets globally.

The story dates back to January 2009, when the French police raided the offices of Hervé Falciani, a  former employee of the HSBC Swiss subsidiary,  at the request of  Swiss authorities. The man was suspected in the theft of confidential information from the bank and authorities confiscated a CD during the raid that contained banking data on  79,000 clients,  dating back to 2006 and 2007. Ultimately, the French authorities decided to keep the information and opened an investigation into those on the list residing in France.

French authorities provided the names and data of  800 Belgian taxpayers to the Belgian government and that country's special tax brigade (BBI) investigated the top 500 clients.

In January, the BBI sought responses from those Belgian HSBC clients, but refused to show  the evidence, prompting those clients to file legal recourse. On September 5, their case was heard by the Council of State, who must decide  whether the BBI was legally obliged to show the plaintiffs this evidence against them.

Among other issues that have befallen this case, two Belgian financial newspapers De Tijd and L’Echo  named some of the bank's clients prior to the complaints.  This made the legal debate even more tumultuous, since the financial press accessed some of the same information being withheld from those suspected in the scheme.  Furthermore, it was becoming a point of contention on the street  that the press had only published the names of people belonging to a certain ethnic group, whereas the scheme, if confirmed as fraudulent, appears to have involved a cross-section of all participants in the local diamond industry.

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Tags: Antwerp, Banks, Belgium, fraud, HSBC, Marc Goldstein, swiss
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