The disclosure of over 10,000 people with more than $100 billion in Swiss accounts at HSBC, the London-based banking group, shows that the bank has housed money for dictators and their families, arms dealers and tax evaders from around the world.
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The move has left the U.S. tax authorities trying to explain why they reached a settlement with the bank without taking action against the account holders themselves. In Britain, questions are being asked about why indictments were only filed against one person from a client list that numbered almost 9,000 Britons.
Israel also takes a prominent place in the affair. It ranks 96th in the world in terms of population, but at HSBC’s Geneva branch Israelis boast the sixth-largest sum on deposit. Among the 6,500 HSBC clients born in Israel and/or carrying an Israeli passport, many are among the country’s elite.
There is nothing illegal about maintaining a Swiss bank account, though since 2003 account holders have been required to report their assets and any income generated from them to the income-tax authorities.
Tycoons on the HSBC list include Lev Leviev, who controls Africa Israel Investments, and his wife Olga, along with other relatives. They were recorded in 2007 as being linked to accounts containing millions of dollars.
Leviev, a co-owner of Israel’s largest diamond polishing firm, is linked to accounts with more than $4 million in which he is a beneficiary. His wife is linked to an account with more than $6 million in the name of an investment firm registered in the Virgin Islands.
Leviev’s brother Moshe is recorded as having a connection to an account that contained almost $4 million. Lev Leviev’s close confidant, the vice chairman of Africa Israel, Avinadav Grinshpon, is also listed as having a link to several accounts. Leviev did not respond to a request for comment.
Shlomo Nehama, who was the chairman of Bank Hapoalim from 1998 until 2007, is linked to an account that in 2007 held more than $104 million. The account is also linked to Ran Attar, chief executive of Attar Management & Investments, which according to the company’s website “offers comprehensive Family Office services for Israel’s wealthy families.”
Nehama, for his part, said the account and all income from it, as well as other overseas bank accounts, had been reported to the Israeli tax authorities.
A father of the diamond industry
One of the accounts mentioned in HSBC documents belonged jointly to the Schnitzler and Gertler families, both key figures in the Israeli diamond industry. It involves an account registered to a Virgin Islands firm called Armoran Investments, the beneficiaries of which are Asher Gertler, the president of the Israel Diamond Exchange.
Shmuel Schnitzer’s father Moshe, an Israel Prize winner, pioneer of the diamond industry and a former diamond-exchange president, was a beneficiary on the account. He died in 2007.
Armoran is registered at the same Virgin Islands address as the Mossack Fonseca law firm, which specializes in registering companies in tax havens. The account in Armoran’s name was opened in late 2004, and in 2007 it contained about $190,000. Three other accounts in the name of three different companies set up in Panama in 1990 contained $38 million.
In response, the families’ said the accounts were held by foreign trusts created by the late Moshe Schnitzer. The trust money deposited with HSBC, as in the other Geneva bank accounts, had all been reported to the Israeli tax authorities, as had the income derived from it. The families declined to comment on the three companies’ businesses.
Asher Gertler’s son Dan is mentioned in the documents as a person who in the past was a beneficiary of an account in the name of marketing firm Sunland and the Concordia Marketing Group; in 2007 this account had about $38,000 in it.
Gertler is considered close to Foreign Minister Avidgor Lieberman and was once investigated over his ties to the Yisrael Beiteinu leader. Gertler’s activities in the Democratic Republic of the Congo have generated a great deal of criticism over the years, with nongovernmental organizations accusing him of acquiring mining rights in that country based on his ties to President Joseph Kabila.
In 2013, Gertler was caught on his private plane with cash-filled envelopes on his way back from the Congo. Customs officials suspected that he aimed to avoid reporting the income, and was ultimately fined about 8,000 shekels ($2,000).
A law-abiding citizen
Gertler’s lawyer Boaz Ben Zur denied that his client had any information about Sunland and Concordia. “Every report to the tax authorities, to the extent necessary, has been done according to the law,” Ben Zur said.
“My client is a law-abiding citizen who takes pains to act in accordance with the tax authorities’ reporting obligations regarding every relevant jurisdiction .... Mr. Gertler is unaware of any links of his to accounts in the name of these companies.”
The HSBC documents show that Doron Ofer, the son of late businessman Yuli Ofer, was linked to accounts that contained more than $65 million. Documents show that Doron Ofer has been in an inheritance battle with his sister Leora.
In the bank records, the first prominent detail relating to Ofer is the instruction “Do Not Contact.” Also appearing are the names of several companies and trusts in the name of relatives, some registered in the British Virgin Islands and others in Jersey, one of Britain’s Channel Islands.
According to the bank records, Ofer was represented by a man named David Levine, who in August 2005 met in London with representatives of the bank. A summary of the meeting sheds light on how the account was managed.
The HSBC bankers are said to have told Levine they wanted to meet with their client, who was later referred to as DO. They wanted to obtain his signature on documents that would confirm Levine’s role in dealing with the account.
According to the records, Levine said that although he understood the bank’s needs, the request would be problematic to fulfill. The client would have reservations about signing any kind of agreement because he would then be considered the one who gave orders to the trustees.
Levine said he had received detailed instructions before the funds were established to verify that the account holders would not have a link to the trustees other than being a beneficiary. As a result, Ofer was barred from meeting with the trustees regularly because this would give the impression they were reporting to him.
One of the bankers said it was possible to word the letter so that the trustees would not be instructed to consider specific actions; instead, they would be asked. Levine said he doubted that Ofer would agree to the condition, but promised to ask him at their next meeting.
He also said he would seek clarifications from Ofer on any questions the bank might pose. He said he would document the responses, but the chances Ofer would sign a document were low.
Ofer’s spokesman declined to comment in detail.
“Doron Ofer has conducted and is conducting himself in accordance with the law and is fully complying with his obligations to the various authorities,” the spokesman said.