Former HSBC banker David Mifsud is being extradited from the UK for tax evasion
This man helped set up hundreds of offshore firms for rich clients. His case shows how Canada has ‘turned a blind eye’ to cracking down on cracking down on offshore tax schemes
A former senior banker at HSBC is being extradited from the UK to Canada on allegations of helping clients evade taxes by operating offshore companies.
David Mifsud, who worked in the Swiss private bank’s Asian private banking unit, allegedly helped over 30,000 clients with offshore companies to keep their money under wraps.
Mifsud “wanted to have an impact,” according to a Canadian criminal justice spokesman. “There was a real sense he wanted to help people – that was the point,” said Jonathan Lis, head of enforcement at Canada’s Serious Fraud Office (SFO).
More than 10,000 clients are believed to have closed offshore accounts at HSBC in the years Mifsud was at the bank, Lis said. Most banks compete for such accounts.
Prosecutors said that Mifsud deliberately steered wealthy clients to use off-shore companies, trusts and cryptocurrencies to shield their assets.
Mifsud set up more than 1,600 companies over a six-year period, according to a Canadian investigation published by the Globe and Mail newspaper. He has denied any wrongdoing.
Mifsud, 57, left HSBC in 2009. He is being charged with conspiracy to defraud and money laundering.
His father Ernst was once Switzerland’s foreign trade minister. The son fought through a Swiss court to declare his rights to the family fortune, which was later contested in a subsequent Swiss constitutional court case.
These cases serve as a stark reminder of how banks use secrecy laws to conceal tax evasion by wealthy clients.
Experts say tax evasion could have cost Europe $1.8tn by the end of last year. Only half of the estimated 75m individuals in Switzerland reported their wealth to the authorities. Most tax evaders evade these funds in secretive offshore companies.
Countries such as France, Britain and Germany have demanded that banks reveal clients’ details. In Switzerland, there is no requirement to identify clients.
But with services increasingly under scrutiny, and many people hunting down the “one in a million” rich offshore accounts, banks are increasingly finding themselves being caught out.
Last week, the French authorities froze €9m of assets in Geneva and Lyon in the case of a suspected tax fraud and money laundering syndicate involving 50 tax evasion cases.
• This article was amended on 18 January 2013. The original said David Mifsud was part of the HSBC board. This has been corrected.