U.S. seeks tax client data from HSBC India

By @ibtimes on

The U.S. Department of Justice is seeking records about American clients of HSBC in India who might be evading taxes, broadening the government's probe of banks suspected of helping tax dodgers.

The government filed the request with a San Francisco federal court on Thursday, seeking permission to get information from the bank about American residents who may be using HSBC India accounts to evade federal income taxes.

The ability to hide accounts in foreign countries is rapidly dwindling, said John DiCicco, deputy assistant attorney general for the Justice Department's tax unit.

The government says thousands of U.S. citizens may have undisclosed HSBC accounts.

The government's petition seeks a so-called John Doe summons to obtain the names of an unknown number of people who may have engaged in tax fraud. Prosecutors employed the same strategy in its case against Swiss bank UBS AG.

The United States has been probing other banks after UBS AG paid $780 million and admitted it helped Americans stash assets overseas tax-free, though it has not targeted other banks officially in court documents until now.

Tax officials have been combing through 18,000 accounts gathered in a tax amnesty program last year and 4,000 more that UBS handed over to end the U.S. government's civil tax probe.

This is consistent with their plan to extend into other countries, said David Gannaway, a former IRS special agent who now helps wealthy clients come clean with the agency. They are looking for which bank has U.S. operations to take them into a country where they believe there is a lot of noncompliance.

The government previously moved against HSBC clients, but those cases have not pursued the bank itself.

For example, in January the U.S. government indicted a New Jersey man for conspiring to hide accounts in India and said five bankers, identified as working for HSBC by people familiar with the probe, helped him do so.

The New Jersey man is an Indian native who became a naturalized citizen of the United States.

A representative of HSBC was not immediately available for comment.

(Reporting by Kim Dixon; Editing by Tim Dobbyn, Dave Zimmerman)

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