Cashed Out

Is HSBC Whistleblower Falciani the French ‘Snowden’?

Thanks to this former bank employee, European governments have been on the trail of tax cheats for several years. But was his motive justice? Or was it money?

By Tony Todd

PARIS — Hervé Falciani, who revealed how HSBC’s Swiss banking arm helped wealthy customers avoid taxes and hide millions of dollars, is a man with an ambiguous, checkered personal story.

Falciani sees himself as “part James Bond, evading dangerous, powerful opponents and working with government intelligence agents, and part disappointed idealist, shocked by the reality he encountered at the bank he once worked for,” according to the International Consortium of Investigative Journalists (ICIJ), which is coordinating the media exposé of HSBC Private Bank’s wrongdoings.

Faliciani is definitely persona non grata in Switzerland, where the attorney general charged him in December 2014 with data theft, saying that he had created “complete client profiles with the intent… of cashing in on this data.”

But Falciani, who has noted with some wistfulness that he fully expects to be convicted in absentia by Switzerland, sees himself differently. He claims this will be his only official recognition for revealing €180 billion worth of personal, corporate and criminal tax dodging.

Falciani, a dual French-Italian citizen who has been described as a “genius with IT algorithms,” started working for HSBC Private Bank in Geneva in 2006, where he claims he pushed to implement procedures that would improve oversight and prevent fraud.

But as he would later explain to the French authorities, he met with resistance from one unit in the bank that “wanted to do things without being monitored.”

He also claimed he made attempts to alert the Swiss authorities, who declined to work with him because he wanted to maintain his anonymity.

In 2008 Falciani traveled to Lebanon with HSBC colleague Georgina Mikhael, with whom the Swiss police say he had a romantic relationship. She would later tell the Swiss authorities that Falciani intended to use the trip to Lebanon to sell the data—and identified Falciani as the person who had stolen it. He allegedly told her he wanted to use the money in a divorce from his wife.

Mikhael, who is a dual French-Lebanese national, had suggested the Lebanon trip. She subsequently began defamation procedures against Falciani related to his claims that he was approached in 2007 by the Israeli spy agency Mossad, which apparently was looking for insider information on funding for terrorist organizations and, Falciani claimed, had been interested in Mikhael’s possible ties to Hezbollah. She is Christian and has said she has no such ties whatsoever.

Back in Geneva, Falciani was arrested on December 22, 2008. After promising to stay in Switzerland and report for questioning the following day, he picked up his wife and daughter and drove to France, where he consolidated the stolen data.

In the last days of December 2008, he met with French contact Jean-Patrick Martini of the French National Directorate of Tax Investigations in Nice, and handed the information over.

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“He was clear that he didn’t want money,” said Martini, who had been in communication with Falciani before he left Geneva. “He didn’t even want to talk about it.”

Switzerland, meanwhile, asked the Nice prosecutor’s office to search Falciani’s father’s flat in the city.

Falciani then explained to Nice police that he had been in contact with Martini, and the city’s senior prosecutor Eric de Montgolfier decided that the information the fugitive banker had handed over was important enough for France to decline Switzerland’s extradition request.

“We could resist giving the material back to the Swiss because it contained things that seemed to be against France’s national interest,” Montgolfier said.

Meanwhile, the French tax authorities got to work with the data, using it to track down domestic tax evaders.

In 2010, France decided to share the information with other states.

One notable result—among many others—was a record $1.9 billion fine imposed on HSBC after the U.S. Senate established that the bank had laundered hundreds of millions of dollars for Mexican drug cartels.

Despite shining a light on HSBC’s involvement in illegal activities, Switzerland, a country that jealously guards its reputation for banking secrecy, maintains that taking the data was a criminal act and that Falciani’s motive, particularly during his Lebanon trip, was for personal financial gain.

Following the U.S. Senate investigation, Falciani was advised he would be safe from angry criminals, his former employer and Switzerland, if he travelled to Spain.

On July 1, 2012, he was arrested in Barcelona on a Swiss warrant and spent five months in jail.

Spain’s national court freed him on the basis of his help to European tax authorities, and the following year rejected Switzerland’s extradition request on the grounds that violating bank secrecy laws is not a crime in Spain.

After handing the data to the French tax authorities in 2009, a copy of the files eventually landed in the offices of the leading French daily Le Monde in January 2014.

The newspaper has refused to reveal the identity of the person who gave it the dossier.

An earlier version of this story appeared on France 24.