HSBC leaks implicated Switzerland in diamond and tax evasion 'laundering carousel' case.
The trial begins in Antwerp today of 14 people accused of taking part in a major money-laundering operation mainly involving the city's diamond industry.
The accused are charged with using Swiss bank accounts and offshore front companies to launder millions of euros in profits from diamond dealing, to avoid paying tax.
The existence of a veritable laundering industry has been well-known in judicial circles for some time; and thanks to a leak of data from the London-based bank HSBC, which revealed in detail the existence of a 'laundering carousel'.
One way the traffic works:
- a diamond dealer takes the profits from diamond sales, and instead of declaring them for tax reasons, transfers the money to an offshore bank account via a number of steps, each intended to muddy the trail.
- That bank account is held in the name of a company registered in one of the world's tax havens, but the company is a nameplate only, intended to act merely as a shield against detection.
- The money can then be transferred to a bank account, in Switzerland or elsewhere, in the name of the company, but available to the original dealer. By this time, any link to tax-evasion has been wiped clean.
Most schemes in operation nowadays are often more complex than the above, but that is the gist. Needless to say, not only diamond dealers are guilty of having recourse to such tactics.
But the trial that opens in Antwerp today involves 14 defendants, most of whom have a connection to the city's diamond industry.
They are accused of having laundered millions of euros via this sort of carousel, between the years 2008 and 2011.
One man, the former dealer Jacob S., has been identified as the operation's alleged leader.
press magistrate Goedele Franssens of the Antwerp prosecutor's office SAID:-.
- "Cash of illegal origin is said to have been transferred via the Swiss accounts of offshore companies with Jacob S. as the economic beneficiary,"
- "There was no economic justification for those transfers.
- After deduction of a commission by Jacob S., the funds would be transferred to the Swiss accounts of other offshore companies."
- Some of those accounts were in the name of Manuj S., another defendant in the case.
- The money laundering cases involved in the trial amount to sums in the millions of euros. "We are talking about the total amount in the eight figures,"
This case has taken almost a decade to come to court, which is not unusual in cases like these, which are immensely complex for investigators.
In the years since 2011, however, significant steps have been taken to make the job of investigators easier, by extending the international network of bodies involved in the exchange of banking information in criminal cases.
However, the number of cases remains small:
- in 2019 the anti-laundering branch of the federal police received only 15 notifications of suspect movements.
- Only three of those came to justice, for a total in dirty money of only €780,000, less than 1% of the total value of the suspect cases notified.