On December 26, 2008, a former systems engineer from HSBC Private Bank — the Swiss subsidiary of banking giant HSBC — sat down with a French tax official in the busy airport of the French Riviera city of Nice, and handed over information that would lead to what has since been dubbed "the biggest banking leak in history."
That day, Hervé Falciani gave Jean-Patrick Martini, an official at the French National Directorate of Tax Investigations, five DVDs containing confidential data on 106,000 HSBC PB bank clients. According to the files, these clients had squirreled away $100 billion in their Swiss accounts, thereby avoiding domestic taxes.
In disclosing the files, Falciani had just revealed the names of 75 percent of his former employer's biggest clients, triggering an international banking scandal and the ire of tax authorities in 203 countries. He was eventually accused of industrial espionage and violation of banking secrecy.
Nearly seven years after the Nice airport meeting, Falciani's trial opened Monday at Switzerland's highest criminal court in the southern Swiss town of Bellinzona. He did not show up in court.
In June, HSBC PB agreed to pay Swiss authorities 40 million Swiss francs ($40.5 million) to settle an investigation into allegations of suspected "aggravated money laundering." But the case against Falciani has gone ahead.
Falciani is accused in Switzerland of "copying banking data from 2006 to 2008 in order to make that data accessible to private companies and public bodies from several countries, including the French tax authorities, from 2008 to 2014." According to the Swiss prosecutor, the former HSBC engineer was hoping to get rich quick by selling the data to the highest bidder.
Last week, Falciani addressed reporters at a press conference in the French town of Divonne, less than a mile from the Swiss border. During the event, which has organized by the Geneva Press Club, the fugitive whistleblower — who has been upfront about breaking the law — announced that he would not attend the court date in Switzerland because conditions for a fair trial had not been met.
"It's the trial of a bank that paid to not be prosecuted," Falciani told journalists.
Court proceedings against Falciani were originally scheduled to kick off on October 12, but had to be rescheduled after the defendant failed to show up. This appears to be a problem that will continue to recur.
As a French national, the former engineer is safe in France because the country does not extradite its own citizens.
In a February 2015 interview with VICE News, Falciani denied he had stolen the information with a view to selling it. "We're going to show — in great detail — who lied," he said. "And you'll see that the first and the last to lie was the bank." In the same interview, Falciani said he hoped the leaks would reveal "what a bunch of jerks" bankers are.
Whistleblower, or opportunistic data thief?
In February 2008, Falciani traveled to Lebanon with his co-worker Georgina Mikhael. According to Mikhael, Falciani was there to sell the data to local banks.
"Hervé Falciani was showing banks an enormous list of client profiles with encrypted names," Mikhael said, in order to "sell the product and do business." Falciani categorically denies these allegations.
According to French daily Le Monde, the former engineer has changed his story about the 2008 Lebanon trip more than once. In 2009, Falciani told French authorities that he had traveled to Lebanon to seek "financing" to fund a "data mining project." In a 2013 deposition in France, he told a French judge that his aim was to "create an alert that would get back to the Swiss authorities" and prompt them to investigate lack of transparency in banks such as HSBC.
On March 18, 2008, a few days after his return from Lebanon, Falciani wrote to British tax authorities to warn them about HSBC's secret tax-avoidance scheme. An email uncovered by Le Monde shows that Falciani did indeed write to Her Majesty's Revenue and Customs (HMRC) back in 2008, but that his offer to provide the organization with a client database went unanswered.
Upon his return from Lebanon, Falciani was put under surveillance by Swiss authorities. By the end of May 2008, Switzerland's government had started investigating the former HSBC PB employee for data theft. His co-worker Mikhael was questioned by police on December 22, 2008, and implicated him.
Two days later, Falciani was arrested by Swiss police and brought in for questioning. Upon his release, he fled to France, where he contacted French tax authorities and agreed to hand over the listings at the meeting in Nice airport.
He has successfully eluded the Swiss judiciary ever since. Falciani's trial is expected to continue all week.
Follow Pierre Longeray on Twitter: @PLongeray