Former JP Morgan vice-president says Argentines have US$400 billion stashed abroad
Tax evasion is a “cancer” caused by a secret network of almost all the banks working together to help people avoid their fiscal responsibilities, former JP Morgan vice-president Hernán Arbizu said yesterday during a hearing of the bicameral commission investigating HSBC’s alleged illegal scheme to help Argentines stash their money away from the taxman.
Arbizu ended up being the only speaker at the commission yesterday as Grupo Clarín’s cable company Cablevisión refused to attend for the second time in as many weeks and HSBC auditors asked for a one-week extension for their testimony, which was granted. Cablevisión didn’t get such luck as the commission called on a judge to file a request to force the company to come, using police force if necessary.
“Argentines have up to US$400 billion abroad and more than 90 percent of it is undeclared,” Arbizu, who worked for five foreign banks, said at the hearing. “The amount of resources used by banks on Argentina in relation to the number of citizens is enormous. If you go to the lobby of any major hotel in the country, you’ll find a bank representative and his client closing a deal.”
After being accused of fraud by JP Morgan for forging a client’s signature, Arbizu handed over a list to Judge Sergio Torres in 2008 of well-known individuals and companies with undeclared bank accounts abroad, with funds totalling US$1.3 billion. Clarín Group’s owner Ernestina Herrera de Noble and the company’s CEO Héctor Magnetto and Amalia Fortabat were at the top of the list, accounting for 40 percent of the funds.
“I’m surprised that HSBC still has authorization to work in Argentina after everything that it has done,” Arbizu said. “Falciani handed over a list as did I but there are probably a lot more Argentines with undeclared accounts abroad. At least 65 percent of the funds are in the United States and the rest are in Switzerland and Uruguay.”
Arbizu pointed fingers at former Central Bank chief Alfonso Prat Gay for encouraging tax evasion in the country by managing the assets of Amalia Fortabat. He compared him with Miguel Abadi, the main tax-dodger in the HSBC scandal.
“He was paid US$2 million per year for handling the Fortabat assets,” Arbizu said. “Abadi did the same and all the commission members agreed to summon him. But not Prat Gay because he has ties with the country’s powerful.”
The former JP Morgan official gave a copy of his undeclared accounts list to the commission and criticized Torres for not moving forward in the case. As a result of Arbizu’s statements, the commission agreed to ask Torres details of the case and to summon Prat Gay and representatives of the banks in which Arbizu used to work — Citibank, JP Morgan, Deutsche Bank and UBS.
“I don’t have the evidence, but it’s likely that part of the undeclared funds of Argentines located in Switzerland and in the United States are invested in ‘vulture’ funds,” Arbizu said. “There’s a fiscal amnesty now in Argentina but most of the people didn’t agree to participate. They don’t care what the commission thinks, they only care about the social circle they are part of.”
Radical party lawmaker Ricardo Buryaile harshly criticized Arbizu, noting there’s an extradition request currently in force against Arbizu by the United States courts as JP Morgan has accused him of fraud.
“Arbizu arrived at Ezeiza International Airport and went to a courthouse to avoid being extradited. He is responsible for his actions, helped tax evasion to grow in the country and cheated in the United States,” Buryaile said. “He incriminated himself to avoid being extradited. If he hadn’t done that, he would be in jail in the United States now.”
A request to the court
After failing to appear before the commission last week, representatives of Cablevisión refused to attend again yesterday and sent a letter instead specifying that all its accounts in HSBC’s Swiss branch have been reported to AFIP tax bureau. The company said the accounts were opened to process payments after the country’s 2001 default and said it has been “harassed” by state agencies and media groups over the last seven years.
“The only company that chose not to come is Cablevisión, questioning the commission and carrying out its own interpretation of what our objectives are,” Victory Front Senator Pablo González said.
The commission will now send a request to a court to force Cablevision authorities to appear, using the letters sent by the company as proof and saying that not attending the hearing is an obstacle to reach the commission’s objectives. Meanwhile, other companies included in the HSBC list will continue to be summoned on the next few weeks — as will HSBC’s auditors.
Source: Buenos Aires Herald