A Belgian judge has charged the Swiss private banking arm of HSBC Holdings Plc with tax fraud and money laundering, accusing the British-based bank of offering diamond dealers and other wealthy clients ways of hiding cash and evading tax.
Prosecutors said on Monday the charges related to business carried out by a Swiss unit of HSBC for wealth management clients, many of them from the large diamond trade in the northern Belgian city of Antwerp.
It said the alleged activities could have cost Belgium hundreds of millions of euros in lost tax receipts.
The action follows the theft of personal details of HSBC private banking clients in Switzerland in 2010, information that has been passed on to Belgian and French authorities.
HSBC Private Bank said it had been notified that it had been placed under formal investigation by a Belgian judge who, along with French authorities, was examining whether the Swiss unit acted appropriately on tax reporting requirements.
"Both the Belgian and French investigations have been notified in our filings previously and we will continue to cooperate to the fullest extent possible," the bank said in a statement.
The charges come more than a year after homes of some 20 clients of HSBC Private Bank (Switzerland) were searched in October 2013 in connection with the investigation.
A spokeswoman for the prosecutors said charges were currently only against the bank and certain employees and not its clients. The judge will ask several employees of HSBC Private Bank to appear for questioning.
"The Swiss bank is suspected of having knowingly eased and promoted fiscal fraud by making offshore companies available to certain privileged clients," prosecutors said in a statement.
The statement said the offshore companies were based in Panama and the Virgin Islands, with no economic activity and their only aim was to hide the wealth of the bank's clients.
