The tax officials are reviewing more than 4,000 HSBC accounts that were opened in the island of Jersey, which is off the coast of Normandy, France, the New York Times reported on Friday. This is the second money-laundering scandal that HSBC, Europe's biggest bank, has faced in 2012.
Earlier this year, the U.S. government released a report that Mexican drug cartels and possible terrorist organizations in Iran had funneled billions of dollars, due, in part, to the lax security by HSBC, CNN Money reported.
Stuart Gulliver, HSBC group chief executive, said in a statement that "between 2004 and 2010, our anti-money laundering controls should have been stronger and more effective, and we failed to spot and deal with unacceptable behaviour.”
Jersey is a British dependency but has a separate tax system and is considered a “tax haven,” according to the New York Times. The most recent money-laundering scandal that has just surfaced involves more than 4,000 HSBC bank accounts that were opened in Jersey. Some of the clients who opened accounts include celebrities; Daniel Bayes, a drug dealer; a computer hacker; several bankers who had face previous fraud allegations; and Michael Lee, who was convicted of having enough guns, an estimated 300, to supply a small army, the (U.K) Daily Telegraph said. The total value of the accounts under investigation is said to be about $1.1 billion.
Although HSBC has already set aside $1.5 billion to pay possible fines in the U.S. stemming from an earlier money-laundering scandal, the company may now be facing fines that could exceed that amount, Forbes said.
Britain's tax authority, Her Majesty's Revenue and Customs, said in a statement Friday quoted by Reuters, "We can confirm we have received the data and we are studying it. We receive information from a very wide range of sources which we use to ensure the tax rules are being respected."