April 15, 2013 / 2:21 PM / 7 years ago

Alleged HSBC data thief in extradition hearing in Spain

MADRID (Reuters) - A former HSBC employee wanted in Switzerland on allegations of stealing data on tens of thousands of bank accounts came before a Spanish court on Monday for extradition proceedings, arguing he was a whistleblower fighting corruption.

The data caused a sensation in 2010 when it ended up in the hands of tax authorities in France, Italy, Spain and other European countries, which have used it to go after billions of euros in lost taxes.

Switzerland has asked for Herve Falciani, who has Italian and French citizenship, to be extradited to face charges there of violating Swiss banking secrecy laws.

Three judges from Spain’s High Court heard testimony from Falciani as well as a French prosecutor, Spanish tax authorities and a government lawyer before adjourning on Monday to consider the case.

They did not hear testimony from Switzerland or HSBC (HSBA.L), and officials from both could not immediately be reached for comment.

The lawyer for the Spanish state argued against extraditing Falciani.

“We can’t punish people who, when they observe criminal conduct where they work, denounce it to the authorities,” Dolores Delgado, state lawyer, told the court.

Falciani told the judges he had leaked the information to fight against a non-transparent system at the bank that made it easy for crime to be committed.

“I want to reiterate my disposition to fully cooperate with all my experience, not only with the European judicial authorities but especially with the first people who should be interested - the Swiss authorities and the Luxembourg authorities who are even more opaque,” he said, speaking in French through a Spanish interpreter.

He told the judges in a courtroom in San Fernando de Henares, outside Madrid, he had received no remuneration for providing the data to France and other governments.

Switzerland’s $2 trillion offshore banking sector, built on strict secrecy laws, has come under pressure as governments around the world try to clamp down on tax avoidance in the aftermath of the 2008 financial crisis.

On Friday the European Union’s six biggest countries agreed to cooperate in the fight against tax havens, piling pressure on Austria to follow Luxembourg in ending bank secrecy. Tax evasion deprives EU governments of roughly 1 trillion euros ($1.3 trillion) annually.

Falciani, who worked as a computer technician for HSBC, collected the data on account-holders from 2006 to 2008, when HSBC discovered the data leak. In 2009 Falciani fled to France while he was under investigation by the bank.

Falciani told the judges that he had fully collaborated with French authorities so that they could use the encrypted data to pursue tax evaders.

HSBC says information on 24,000 client accounts was involved. French officials have said it was more than four times that many.

Former Spanish tax authorities told the judges that they had used Falciani’s data, which they received from France, to pursue hundreds of tax evaders.

Falciani traveled to Spain by boat in July 2012 and was arrested in Barcelona on an international warrant seeking his extradition to Switzerland.

He was held in custody until December, when he was given conditional release pending the extradition proceedings.

Reporting by Emma Pinedo; additional reporting by Sarah Morris; Writing by Fiona Ortiz; editing by Jane Baird

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