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UK Pursues Tax Evaders Using Stolen Bank Details 315

Posted by timothy
from the state-vs.-man dept.
Andrew Smith writes "The UK taxman (HM Revenue & Customs) is reportedly using a stolen list of bank details to pursue wealthy individuals with off-shore accounts. The list was stolen by an employee of HSBC, and gave details of the bank's customers with money in Swiss accounts. The bank employee fled to France, and the authorities there passed the details on to the UK tax collection agency."
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UK Pursues Tax Evaders Using Stolen Bank Details

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  • If the government somehow steals something, it's alright!

    • by schwit1 (797399) on Sunday September 26, 2010 @02:25AM (#33701548)

      "In the HMRC case, a former staff member at HSBC's Swiss division stole highly sensitive data belonging to 15,000 high net-worth account holders earlier this year and fled to France.

      The list was passed to the French authorities, who in turn handed the relevant details to HMRC."

      Not to use the information would be a disservice to all UK taxpayers.

      The article also mistakenly treats tax avoidance and tax evasion as being synonymous.

      • Re: (Score:3, Interesting)

        by dwillden (521345)
        Question: Does British Law have a "Fruit of the poisoned tree." concept like US law? If so then this list cannot be legally used to prosecute tax avoidance or evasion.
    • by Eudial (590661)

      The government doesn't steal, it expropriates.

    • by shentino (1139071)

      The stolen information was confiscated by the authorities.

      It's just that they uncovered evidence of other crimes while they were busting for data theft.

  • by flyingfsck (986395) on Sunday September 26, 2010 @02:06AM (#33701478)
    The government spies steal data all the time - it is what they do. The author of this article must be very young...
  • Two Wrongs. . . (Score:5, Interesting)

    by Apple Acolyte (517892) on Sunday September 26, 2010 @02:08AM (#33701492)
    often do not make right, as the old saying points out. It's an interesting legal question, though: Does a country have a right to use information illegally obtained by a third party to enforce laws against those implicated by that tainted information? In the US evidence that is obtained without legal authority to obtain it can often be thrown out of court through the "exclusionary rule," a legal doctrine often mentioned in connection with a concept of some evidenced being obtained as the "fruit of a poisonous tree." I wonder if the UK has any similar sorts of protections - note that I'm not implying that such protections in the US legal system would necessarily protect anyone if this story had occurred in the US instead of the UK. Governments are clearly zealous about protecting the tax revenue they take from their citizens.
    • by waferhead (557795)

      I'll take a shot at it... at least based on how the US legal and tax system work. (sort of inherited from the British, at least loosely)

      There would likely be protections from criminal prosecution (inadmissible evidence or such) at least until they found enough evidence OTHER than the list itself.

      BUT---The tax man doesn't really care much to prosecute you.
      He wants his money. ...You give him the money, or he takes it forcibly.

      You aren't likely to make much if convicted/in prison, so it's sort of a twisted win

    • Re:Two Wrongs. . . (Score:5, Interesting)

      by mpoulton (689851) on Sunday September 26, 2010 @02:35AM (#33701584)

      In the US evidence that is obtained without legal authority to obtain it can often be thrown out of court through the "exclusionary rule,"

      The exclusionary rule does not apply to this type of instance. This information would be admissible in the US. The exclusionary rule only bars the admission of evidence which was obtained illegally BY THE GOVERNMENT or someone working on the government's behalf. When evidence is obtained due to a third party's criminal act (which was not induced by the government), it is not barred. For example, if I undertook my own independent investigation of a murder case and committed criminal acts to obtain evidence, then turned that over to the state, it would not be barred by the exclusionary rule unless it could be shown that I was cooperating with or induced by the state to violate the defendant's rights. IANAL, but I am a 3rd year law student.

      • Re: (Score:3, Insightful)

        by ebonum (830686)

        But the person who stole the data was paid by the government. That makes him an agent of a foreign government in Switzerland. He was paid by the government ( French government ) for his work.

        If he was in the US, stealing data from Bank of American for France and being paid millions of dollars for the theft, he would be an agent of the French government. As such, he could be arrested in the US for failing to register as an agent of a foreign government.

    • Re: (Score:3, Interesting)

      by Joebert (946227)
      The list in this case might be probable cause to court order a recent list from the bank itself to verify the questionable lists authenticity. Assuming the person in question was in a position to obtain such a list, the only question here is whether the list is authentic and whether it was modified, both of which can easily be answered definitively with a current list from the bank.

      Technically, I think the person who stole the list could argue that it's not actually a real list, that they forged it in an
      • Read the thing you should read before posting. The list was stolen in Switzerland. The Swiss want to arrest him. But he's in France and it's not possible to extradite him.

    • Re:Two Wrongs. . . (Score:5, Interesting)

      by redhog (15207) on Sunday September 26, 2010 @03:39AM (#33701766) Homepage
      The US and UK are common law countries, and I think that this is something that might differ between common law and civil law (so France might be up to bad stuff here).

      In Sweden (a civil law country), we have freedom of evidence - anything can be presented in court as evidence, regardless of how it was obtained. If the police somehow obtains evidence illegaly (e.g. through burglary), that will be prosecuted separately. Since this second case does not affect the original court case, nor is affected by it, the police man / upper chain of command ordering the illegal act will get punished regardless of if the original case is thrown out or the defendant found guilty.
      • by malkavian (9512)

        That seems far more fair than the cloak and dagger technicalities employed by the UK (where I live) and the US..

      • by vakuona (788200)
        I like the Swedish system! Criminals shouldn't get away because of technicalities, as long as there are appropriate safeguards, in this case, police being prosecuted for wrongdoing in obtaining evidence.
      • Re:Two Wrongs. . . (Score:4, Insightful)

        by russotto (537200) on Sunday September 26, 2010 @10:31PM (#33707494) Journal

        If the police somehow obtains evidence illegaly (e.g. through burglary), that will be prosecuted separately.

        Does this ever actually happen? In the US, there have been serious arguments against the exclusionary rule, on the grounds that the police should and will be punished separately for their acts. In practice, they never are, and those advocating against the rule on those grounds are either extremely naive or are simply being disingenuous.

    • Re:Two Wrongs. . . (Score:4, Informative)

      by houghi (78078) on Sunday September 26, 2010 @04:03AM (#33701828)

      Does a country have a right to use information illegally obtained by a third party to enforce laws against those implicated by that tainted information?

      I would say yes. It happened in Belgium a few years back as well with banks in Luxembourg. The article also talks about the case in Germany where authorities bought the list.

      Also these will not be directly used for a court case, but for tax investigations. There will be a lwhole lot of different rules that apply there.

      In Belgium when it was known that the list was available, people had the chance to 'come clear' and confess without any serious trouble (except they had to pay their taxes).

      As it has happend at least twice (Germany and Belgium) I also do not see what the news worthyness is. Oh, right. This is /.

    • A year or two ago, they actually purchased stolen bank data, and then helped the thief go into hiding. As far as I can see, there is every reason to charge the officials involved with trafficking in stolen goods.
  • by nido (102070) <nido56@ya h o o.com> on Sunday September 26, 2010 @02:29AM (#33701552) Homepage

    It seems to me that Governments should wield the power to make money, and politicians should debate about where to spend the newly created money.

    But as it is, in the UK, the United States, and elsewhere, banks create money, and decide who to loan it to. Governments have no other choice but to levy taxes on the economy.

    Like Colbert said in his testimony about migrant farm workers [washingtonpost.com] (8:54), the political game is all about power, and the biggest economic power of all is "who gets to create money first." Whatever happened to that bill to 'Audit the Federal Reserve" (which is owned by private member banks)? I haven't kept up... Whatever you think about the Fed, at least its profits are returned to the U.S. Treasury now.

    Richard C. Cook's Bailout for the People [wordpress.com] (pdf [richardccook.com]) has a really nice overview of an economic system that would work for the benefit of everyone...

    Some other sites:
    http://www.monetary.org/ [monetary.org]
    http://www.webofdebt.com/ [webofdebt.com]

    • Re: (Score:3, Informative)

      by Z34107 (925136)

      But as it is, in the UK, the United States, and elsewhere, banks create money, and decide who to loan it to. Governments have no other choice but to levy taxes on the economy.

      Governments have "no other choice" than taxes? Governments control fiscal and monetary policy. They directly control how much banks can lend, and manage the effects of that lending. Some examples:

      • Governments can set reserve requirements - a minimum amount that banks must keep in their vaults. You can't loan out money that you'r
      • by hitmark (640295)

        One interesting form of money supply control i read about involved the government basically spending the money into existence, and then taxing it out of existence. So when there is not enough money in circulation the government would put it into existence by building roads and such. And when there is too much, they would raise taxes.

  • That's Why... (Score:2, Interesting)

    by BlueStrat (756137)

    ...When it comes to a national government's size, scope, and powers, smaller & weaker is good. Yes, it makes it harder to get "free government stuff" (that you end up paying for over and over, but I digress). But, it's hard for anyone to be or use a jack-booted thug/enforcer if there is no government department to create a jack-booted-thug/enforcer division or pay the jack-booted thugs/enforcers, or give them lists of targets...err, "citizens" to do the whole "boot crushing a human face...forever" thing

    • Re: (Score:2, Troll)

      by Mashiki (184564)

      Considering government bloat is the fastest way to hemorrhage money I agree. In Canada it take 4 people to pay for the job of 1 civil servant. It's probably around 6:1 in the US, government makes no money, it creates no money, all it does it take and spend another persons.

      • Re:That's Why... (Score:5, Insightful)

        by evilviper (135110) on Sunday September 26, 2010 @04:13AM (#33701850) Journal

        In Canada it take 4 people to pay for the job of 1 civil servant. It's probably around 6:1 in the US

        Well I would certainly hope the government doesn't have a tax-rate of 100%, which would be necessary (in most cases) for 1 person to pay the salary for 1 civil servant...

        government makes no money, it creates no money, all it does it take and spend another persons.

        Government isn't supposed to "make money". It's supposed to provide the services we all need to survive, and aren't efficient to provide on an individual basis. I'd sure like safety, but I can't really afford my own private police force. International trade is nice, but I can't afford a navy. In so much as providing safety and stability CREATES MONEY, most governments do exactly that, with your taxes.

    • The trouble is of course that while you are right about government thuggery, if absent it is quickly replaced by wealth-based thuggery. There is no escape.

      All you get is to chose who the thugs will be: hereditary dynasties descended from wealthiest people (a.k.a. nobility) or somewhat-controllable (at least in theory) by the citizenry government pencil-pushers. Or a combination of these.

      There appears to be no other choices. All the libertarian utopias so far proposed have the common characteristics of bei

    • Re: (Score:3, Insightful)

      by Xyrus (755017)

      You're right. Instead of an elected government creating the jack-booted thugs you have un-elected private corporations creating the jack-booted thugs. I can see how that is so much better.

      What, you think companies never employed their own mafia-esque type practices? You think companies, who's only goal is to make money, would never rape the public for their own personal good? You're either really naive or you haven't read up on history.

  • It's wrong to start buying stolen data even for tax evasion, because this
    kind of business can easily extend to other domains. For the "good" cause
    governments justify now to finance data stealing in other countries, but
    the day these same governments are themselves victims of such practices
    they will for sure find it illegal..

  • Cool! (Score:2, Insightful)

    by ebonum (830686)

    This means that evidence gathered illegally is admissible!
    Get a confession by torture. No problem.
    Illegal wire tap? This never was much of a problem in the US.
    Taking pictures of police engaging in illegal activity where photography is banned. The judge won't throw out the evidence.

    • by radio4fan (304271)

      This means that evidence gathered illegally is admissible!
      Get a confession by torture. No problem.
      Illegal wire tap? This never was much of a problem in the US.
      Taking pictures of police engaging in illegal activity where photography is banned. The judge won't throw out the evidence.

      Imagine the police apprehend a burglar climbing out of the window of Dr Evil.

      He has in his swag bag the Koh-i-Noor diamond, recently stolen from the British Crown Jewels.

      Are you suggesting that the police shouldn't investigate the possibility that Dr Evil stole the diamond in the first place?

      Should they just say:

      "Damn. There's nothing we can do. The evidence was gathered by illegal means."

      I think not.

    • Re: (Score:3, Insightful)

      This means that evidence gathered illegally is admissible!

      How? Information about where the stolen taxmoney is located isn't really evidence of tax evasion. Actual evidence of tax evasion would be the actual offshore account itself. At worst this should be viewed as a breach of privacy.

      Get a confession by torture. No problem.

      Not the same thing. Let's say you torture a guy to find the money, he'll say anything, but if he doesn't actually have the money, all you'll get is lots of useless information a

    • by Gnavpot (708731)

      This means that evidence gathered illegally is admissible!
      [...]
      Taking pictures of police engaging in illegal activity where photography is banned. The judge won't throw out the evidence.

      I am in doubt. Would the correct moderation of your posting be "-1 Obviously naive" or "+1 Apparently naive"?

    • Re: (Score:3, Insightful)

      by evilviper (135110)

      This means that evidence gathered illegally is admissible!

      No one has been arrested or prosecuted based on this information, nor will they be. What this information does is separate those who are evading their taxes, versus those who are not. That makes large-scale investigation vastly easier by directing you at targets. I'm willing to bet the authorities can prove tax evasion by everyone involved without actually using the leaked HSBC information in court...

    • by ebonum (830686)

      This should be obvious. There is a general principal that evidence must be gathered according to a long list of rules. The rules are there to protect the people from their government. There are a lot of criminals who walk free in the US every year because the police and/or the district attorney made a mistake. That is why you pay a lot of money for a good lawyer when you are in trouble. Any mistakes that the lawyer finds will ALWAYS work to the defendant's favor. By allowing an exception for this situ

      • by gbjbaanb (229885)

        In all cases its down to whether the government directly violated your rights to obtain the information. If they paid for these accounts to be stolen, then they're inadmissible. If they sent Bond to get them, inadmissible.

        If someone steals them anyway, then offers them to the government - either for free, or for cash - then that's fine. You might want to prosecute the burglar, but that's not part of this discussion.

        Quite often the government does advertise for information - they pay rewards for information

  • by Required Snark (1702878) on Sunday September 26, 2010 @03:18AM (#33701710)
    The IRS has a blog about this, and you can report some one. http://irsmostwanted.blogspot.com/2010/07/hsbc-clients-with-asian-accounts-said.html [blogspot.com]

    This is similar to the recent IRS action against USB, the big Swiss based bank. USB was actively involved in smuggling assets out of the US, including telling people how to get diamonds and then putting them in toothpaste tubes to get around customs. http://gswlaw.com/irsblog/2009/08/31/ubs-whistle-blower-gets-40-month-sentence/ [gswlaw.com]

    These tax cheats are scum sucking pigs. The high end ones have huge amounts of money and they still cheat. Can you afford to buy diamonds to smuggle out of the country? Remember, people with six figure incomes pay less then the rest of us because they get taxed at capital gains rates, which can be as low as 15%. Real working people pay around %30 or more. http://en.wikipedia.org/wiki/Capital_gains_tax#United_States [wikipedia.org]

    When these greedheads duck out on taxes, the rest of us have to pay a lot more. This is on top of all the custom tax breaks that big corrupt corporate players have put in the law by buying legislation. The ballooning deficit in the US is due to tax cuts for the ultra rich, not because taxes are too high for the remaining 99% of the population. The right wingers who say otherwise are lying weasels, and if you believe them then you are weak minded and like having your pocket picked by the rich.

  • Western governments will pay you millions to steal your employer's data!!!

  • Stolen? (Score:4, Insightful)

    by houghi (78078) on Sunday September 26, 2010 @03:51AM (#33701788)

    If this was about any other data, like mp3, it would be called a copyright infringement.
    If this would be data that the government was hiding, it would be called "Freedom of information".

    Don't forget that the tax evaders willingly committed fraud.

    I understand that people do not like paying taxes, but that does not mean it is OK to use illegal ways to go about it. These will be big accounts. And if they did everything honestly, there should be nothing to worry about as the tax men already have the information.

    • Re: (Score:3, Funny)

      by MartinSchou (1360093)

      If this was about any other data, like mp3, it would be called a copyright infringement.

      Not quite. Since the information in question is not any kind of creative work (apart from possibly creative bookkeeping) but merely a collection of facts, it is not copyrightable in most countries, and definitely not in the EU.

      Now, is it bad that a banker is copying what is expected to be confidential information and selling it to outside parties? Certainly. But that does not make it copyright infringement.

  • Not a first (Score:2, Interesting)

    by Leon Buijs (545859)
    This has happend before with bank data from Germans at a foreign bank that were stolen by an employe and then sold to the German authorities. There was a lot of discussion but in the end the German gouvermant DID use the data. Again, the same thing is about to happen in the Netherlands, with data from banks in other parts of Europe. The Dutch tax department offers offenders a 'inkeerregeling': If you turn in the illegal foreign savings, you get a much lower fine than if you take your chances and wait for

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