GETTING PERSONAL: HSBC Offshore Account Holders Get DOJ Visits

16th Jul 2010 19:01

By Arden Dale A DOW JONES NEWSWIRES COLUMN Some Americans who put their money in HSBC Holdings PLC (HBC, 0005.HK) accounts offshore can expect the Department of Justice to come knocking on the door--literally. The agency is sending its agents directly to the homes of some account holders as it investigates people who may have evaded taxes through HSBC accounts in India, Singapore and perhaps elsewhere, according to an attorney for several people who have accounts. The personal visits are one aspect of an investigation that has also used a form letter to let account holders know they are under criminal investigation. The DOJ letter says the agency is looking into whether taxpayers may have violated federal criminal laws by failing to report they had a financial interest in, or signature authority over, a financial account located in a foreign country. Whether an HSBC account holder gets a letter or a visit seems to depend on where he lives. Lawyers in Los Angeles and Chicago have reported that clients received letters, while New York account holders are being contacted in person, according to Bryan C. Skarlatos, a partner at law firm Kostelanetz & Fink LLP in New York. The reason, he said, is that different DOJ lawyers are handling the investigation in different parts of the country, and are taking various approaches. When HSBC clients get a visit, the DOJ representative at their door is saying, "I'd like to speak with you about your HSBC account," said Skarlatos. They have arrived early in the morning or late at night, he added. The DOJ letter doesn't mention the bank involved by name, but attorneys who provided it to Dow Jones Newswires confirmed the recipients are HSBC offshore account holders. Copies received by various account holders have been dated June 21, July 9 and July 12. It says the DOJ has reason to believe the recipient had interests in foreign accounts that weren't reported to the Internal Revenue Service on either a tax return or a special tax form used to report foreign accounts. It is signed by Kevin M. Downing, DOJ senior litigation counsel. Scott D. Michel, an attorney at Caplin & Drysdale in Washington, D.C., said some of his clients have received the letter. He said the source of the government's information isn't disclosed--whether it's "a whistleblower, cooperation by the bank or some third party, or what." "It's also unclear whether the bank is in fact a target of the investigation," said Michel. HSBC declined to comment on the matter, but spokeswoman Juanita Gutierrez said, "HSBC does not condone tax evasion." The DOJ did not immediately comment. (Arden Dale is a Getting Personal columnist who writes about personal finance; she covers topics including tax and estate planning, retirement, investment strategies, and financial needs of small businesses. She can be reached at 212-416-2234 or by email at [email protected].) (TALK BACK: We invite readers to send us comments on this or other financial news topics. Please email us at [email protected]. Readers should include their full names, work or home addresses and telephone numbers for verification purposes. We reserve the right to edit and publish your comments along with your name; we reserve the right not to publish reader comments.) (END) Dow Jones Newswires July 16, 2010 14:01 ET (18:01 GMT)