From hitherto-unknown details about long-dead scandals to tales about the 'housewives of HSBC,' the ICIJ's revelations are a treasure-trove for compliance officers and money-laundering reporting officers.

The secret HSBC files that the International Consortium of Investigative Journalists has publicised are based on data originally smuggled away by an HSBC employee and handed over to the French authorities in 2008. Most client and account data in the files comes from the period 1988-2007; amounts date from 2006-07.

Conflict over diamonds

Some 6,500 Israelis held about $10 billion in secret bank accounts at the Geneva branch of HSBC between 1988 and 2007 - a fact that has caused a stir in the Israeli press. Linked to Israel (and to Antwerp) is a more serious revelation - HSBC's role in the activities of Erez Daleyot, a Belgian-Israeli diamond magnate who is now reportedly under investigation in Belgium for money laundering and tax evasion. In the mid-noughties, he held at times as much as $35.5 million at HSBC Private Bank 'in accounts tied to shell companies in the British Virgin Islands,' as the ICIJ puts it.

In December 2011, the London Financial Times reported that Lazare Kaplan, the diamond-dealing giant, was "suing two Belgian banks for allegedly stealing $135m in diamond sales by funnelling the proceeds through numerous shell companies across Europe, the Middle East and Asia." The complaint, a civil one made in a US court which Compliance Matters has seen, implicates Daleyot and asks for a jury trial to be convened, although it does not name him as a defendant. Lazare seeks redress under the Racketeer Influenced and Corrupt Organizations Act ("RICO") for catastrophic damages to its business that were caused by a racketeering, fraud and money-laundering scheme conducted by banks KBC and ADB, in concert with a complex web of individuals and entities controlled by or associated with Daleyot, who was their customer. The two banks and Daleyot's entities allegedly stole and diverted in excess of $135 millions' worth of diamonds that Lazare and its affiliates had bought or financed.

This is nothing new, but the leaked files also show that HSBC overlooked plenty of Daleyot's unsavoury associates, especially Arcadi Gaydamak, a Russian-born Israeli business magnate convicted in absentia in France of organising arms trafficking in Angola during the civil war in 1993-1998 in the amount of $790 million in contravention of international law. Daleyot also funded his friend, Jacob 'the jeweller' Arabo, who later admitted to submitting a false document to the federal authorities attesting that pieces of jewellery had simply been lent for a video shoot when in fact they had been sold. At one time, the records show, HSBC held accounts for 2,000 people in the diamond trade, many of them with murky associations and/or subject to police investigations, according to the ICIJ; the bank ceased to have customers from this sector in 2013. A Belgian prosecutor charged HSBC’s Swiss unit in November with fraud, money laundering, and criminal conspiracy, most of it connected to customers who made their living from the diamond trade.

Conflict diamonds are a factor here. An HSBC diamond-dealing customer named Emmanuel Shallop was mentioned in a 2001 United Nations report for doing business with the rebels in Sierra Leone’s civil war, but this did not stop the bank acting for him. In 2010 he was convicted in Belgium for facilitating 'blood diamond' trades involving dozens of millions of dollars.

Halliburton's aftermath

Then there are fresh revelations about the old story of the British tax lawyer who used HSBC accounts in his name and those of members of his family to facilitate a $182-Million Halliburton bribery scandal in Nigeria. Jeffrey Tesler pled guilty to US bribery charges in 2012 saying, much as HSBC is saying about all the recent leaks, that he 'made mistakes' and 'didn't look'. He used bank accounts in offshore tax havens to funnel bribe money to Nigerian officials who then authorised $6 billion worth of construction and other contracts. The newly publicised files show links between Tesler and other Nigerian officials whom he did not name while negotiating with the Americans. These were Major General Chris Garuba (chief of staff to the president and a former governor of Northeastern Bauchi state) and Andrew Agom, a board member of the ruling party, the latter now deceased. The major-general at least was a classic 'politically exposed person' whose involvement should have attracted 'extra due diligence' at all banks that encountered him or his 'close associates'.

Unfortunately, Nigeria's government has not taken action against the officials at the receiving end. Also of note is the fact that in 2010 Nigeria indicted former US Vice President Dick Cheney, who was the CEO of Halliburton before 2000, over the affair but absolved him later when Halliburton worked out a $35 million settlement. Cheney is the only sitting 'veep' to shoot someone since Aaron Burr killed Alexander Hamilton in a duel in 1804.

The fact - exposed in Le Figaro in December 2003 - that Tesler was under investigation did not stop HSBC from advising him. The bank must have known he was a mere lawyer, yet he and his family had tens of millions in their accounts in 2006-7. Neither his wife Judy nor his daughters have been prosecuted. Judy at one point 'owned' $35 million. The leaks say that one daughter, Laura, was a student at the time with no visible means of support and became a millionairess overnight. She was the beneficial owner of an account in the name of a Panamanian company that held almost $4 million. In 2005 Judy Tesler ordered some buying and selling activity on an account to the value of $380,000. HSBC should not have done her bidding as the account was frozen under a court order that stemmed from the publicly known investigation, but it allowed the sale of the investments anyway. Far from reporting a crime, as was its legal duty, the bank seems to have performed one.

Caught out

One small revelation concerns a British HNW client called Keith Humphreys, who was a director of Stoke City FC. Notes in one file refer to him telling his HSBC RM that one of his family’s Swiss accounts was 'not declared' to the Inland Revenue. According to the file, it held $450,000. Recently Humphreys told the Guardian that the account was in the name of his father and that it was "disclosed to British tax authorities in 2011, with a settlement of £147,165," suggesting that the British tax authorities knew that something was up.

Pulling America's Golden Chain

The 'Golden Chain' was a list of purported sponsors of Al Qaeda that Bosnian police seized in March 2002 in a raid of the premises of the Benevolence International Foundation in Sarajevo. Osama bin Laden had been known to refer to it warmly. The list was of 20 top Arabian (Saudi and otherwise) financial sponsors of Al Qaeda, including bankers such as Khalid bin Mahfouz, who died in 2009, and businessmen and former ministers. Everybody in the money-laundering world knew of the list by spring 2003 and yet, according to the ICIJ, HSBC was still processing accounts for at least three people on it after 2003. Carl Levin, the chairman of the US senate committee that spearheaded the $1.9 billion fine of December 2012, stated the US law most clearly: whenever HSBC or any bank encountered anyone on that list, they should have 'taken notice', classified them as highly risky clients, and trimmed their relationships accordingly. This they do not seem to have done.

Prosecutions pending?

HSBC is looking more and more like an international crime syndicate. Criminal prosecutors in Belgium, France and Argentina are now investigating the Swiss unit of London-based HSBC and some of its customers. A former HSBC employee called Hervé Falciani seems to have 'blown the whistle' in the Belgian case, in which HSBC stands accused of no less than outright money-laundering in its efforts to help 1,000 Belgian HNWIs commit tax evasion. At the same time, the Australian Taxation Office says that it is investigating 'discrepancies' in accounts that HSBC held for Australians in those far-off days. Civil cases also allege its involvement in the rigging of gold and silver prices.

Regulators, too, have been giving HSBC a hard time ever since the mega-fine of $1.9 billion - almost five weeks' revenue - that it had to pay in 2012 for ten years of money-laundering. It has had to pay £618 million to British and American regulators for illegally fixing rates and is being pursued by the US Federal Depositary Insurance Company for more, and the US Securities and Exchange Commission has recently fined its Swiss arm for doing unregulated business in the US.

Here and there

Another interesting revelation concerns the self-classification of wealthy customers at HSBC's private bank. An amazing number - more than 7,300 - described themselves in the files as 'housewives.' (Less than 4,000, by contrast, were classified as 'without profession' or 'student', which were other favourites.) Mary Wells Lawrence, an advertising guru and the first woman to be in charge of a corporation listed on the New York Stock Exchange, so described herself. She lived in a mansion in Mustique and held two accounts at HSBC, one in the name of a Bahamas offshore company called Five Angels Investment, and another called Scandia Corporation. About $140 million resided within. Other atypical 'housewives' included Saudi Princess Lolowah, a now-deceased Thai-businesswoman-turned-fugitive called Khunying Patcharee Wongpaitoon, and septuagentarian fashion heiress Arlette Ricci, who was actually a theatre director, with more than $20 million in the account of a company registered in Panama. This last lady was reportedly charged with tax fraud in France because of undeclared Swiss accounts. The word 'housewife' might be viewed as more of a 'red flag' than as a badge of domestic simplicity if these files are anything to go by.

The ICIJ has also published verbatim accounts of HSBC staff, usually relationship managers it appears, writing about their clients. They touch on a need for discretion that regulators sometimes neglect, i.e. security worries that high-net-worth individuals have, as evidenced in these quotations:

* "We are prohibited from calling the client in Belgium. It’s always him who calls us. He telephoned today. He introduces himself under the name of a footballer (Johann Cruyff); wants to know the “price of caviar,” which means the total value of his assets."

* "Mentioned they are very concerned with confidentiality and security, his wife has already been kidnapped right after their marriage and was found by the police…brother has also been kidnapped."

* Another quotation typified many, this time on a darker theme: "I again indicated that we were not tax inspectors."

All human life is here. The ICIJ is not providing a link for a full downloading of the files. This may be because it wants to gain some sort of commercial advantage. The public may have to wait for more selective leaks through newspapers such as Le Monde and the Guardian.