Hervé Falciani, the 40-year-old Italian-French computer expert who stole thousands of bank records of HSBC clients in different countries who held secret Swiss accounts, is sitting in a Spanish jail awaiting the court’s ruling on whether he should be extradited to Switzerland to face criminal charges.
Falciani was arrested on July 1 in Barcelona after he disembarked from a boat and showed his passport. Immigration officials found that he had an outstanding international arrest warrant and immediately detained him.
Now the former computer technician and HSBC employee is fighting extradition, using all types of legal arguments, including his past cooperation with Spanish authorities and the same High Court in prosecuting hundreds of Spaniards who held accounts at the British bank on tax evasion charges.
But Judge Eloy Velasco ruled on August 10 that it wasn’t the court’s prerogative to determine whether what Falciani did was legal or illegal, but only to weigh whether conditions exist to turn him over to Swiss authorities.
Falciani made international headlines in early 2010 when HSBC identified him publicly as “the thief” who stole confidential data regarding some 24,000 clients. The information, covering a 10-year period between February 1997 and December 2007, involved an estimated 15,000 existing clients who had Swiss accounts before October 2006 and an additional 9,000 closed accounts, the bank said.
Falciani worked at HSBC as a computer service specialist who was in charge of migrating data on individual accounts. Between 2006 and 2008 he mirrored the information on personal devices. At first, he tried to sell the data to the Lebanese bank Audi after traveling to Beirut under the false name of Ruben Al-Chidiak.
In a 2010 interview with Le Matin Dimanche, a major Swiss daily, Falciani claimed that the Mossad had kidnapped him at one point because the Israeli intelligence service was investigating ties between Hezbollah and HSBC. “They told me they suspected Lebanese Hezbollah of trying to use the bank for criminal ends,” he said.
Falciani failed to sell the information to the Lebanese bank, and then began offering his data to different European intelligence agencies. In December 2008, Swiss authorities filed charges against him and the computer analyst fled to the south of France. Because France does not extradite its own citizens — the same policy as the Swiss employ with their own — Falciani was safe. He even felt assured traveling to Italy because the Italians also place similar limits on extraditing their citizens.
But a month later, a Swiss judge asked French authorities to issue a warrant to search Falciani’s home. Computers and other items were confiscated, but instead of turning them over to Berne, investigators used the data to begin ferreting out French tax evaders — some 3,000 cases were opened. The action strained relations between the French and the Swiss, and other countries began demanding that Switzerland change its bank secrecy laws.
In May 2010 France turned over data concerning 659 Spanish account holders to authorities in Madrid. One of the accounts was in the name of the father of Banco Santander Chairman Emilio Botín, who eventually agreed with Treasury officials a payment of 200 million euros in back taxes to settle the matter.
Criminal charges for fiscal crimes against Botín — who always maintained that he never knew that the account existed — were presented to the High Court. But the judge dropped the case after Botín had settled the issue with the Treasury.
In all, France, Italy, Britain, United States and Spain have reportedly used the information coming from “Falciani’s list” to go after their own tax cheats.
But now that Falciani is being held in a Spanish jail, the High Court is faced with a legal problem, according to judicial sources.
The information coming from Falciani’s database has already been used to go to prosecute Spaniards and no one in Spain has presented a complaint against the former HSBC computer analyst for “stealing” private bank records.
On October 26, 2010, Carlos Ocaña, then the Treasury secretary of state, said that thanks to Falciani, the AEAT tax agency accomplished its “biggest regularization in the tax collection history.” In all, the Spanish authorities became aware of more than six billion euros in unpaid taxes.
But Switzerland insists that the information used to prosecute others in different countries was obtained illegally. “It concerns private data (names, last names, ages, professions, nationalities, addresses, telephone numbers, family relations, etc.), account balances, deposits, and reports about visits that describe, in part, if not entirely, the economic activities that HSBC held with its clients in the past 10 years,” reads the extradition petition to the High Court.
But there are many legal questions before the High Court. First, the crimes that Falciani is being accused of in Switzerland are not considered crimes in Spain. In fact, the Law for the Prevention of Money Laundering states that banks have the obligation to report any illicit activities. This might not apply to Falciani because he was only an employee, but the results from the hundreds of investigations opened in Spain because of his list prove that he complied with the law.
His extradition also poses another dilemma for the court because if he is sent to Switzerland, it could only serve to unravel the cases already settled. In other words, lawyers for account holders can go back to court and claim that the information used against them was in fact obtained illegally and therefore inadmissible.
“I am against banking secrecy,” Falciani told Le Matin Dimanche. “On the contrary, I say there is none. HSBC clients were deceived and harmed because of a lack of computing standards.”