Ex-HSBC Worker Extradition Risks Crashing Into Spanish Politics

(Bloomberg) -- Former HSBC Holdings Plc computer specialist Herve Falciani is in trouble again in Spain, and this time may be at risk of getting caught up in a Catalan political drama.

The Frenchman stole client data and then leaked the information to authorities, triggering tax-evasion probes across Europe. He styles himself a whistle-blower, while HSBC says he’s a thief. He was convicted in Switzerland in absentia on charges of industrial espionage, but was safe in France, which wouldn’t extradite him.

He was nabbed Wednesday in Madrid by police after they said Swiss authorities called for his extradition. It’s the second time the Swiss tried to get him from Spain, where judges rejected his extradition in 2013 because his actions in Switzerland weren’t illegal in Spain.

But with his new arrest, just before he was to speak at a university event in the Spanish capital headlined “When Telling the Truth is Heroic: Shedding Light on Tax Havens,” comes new risk. Politics in Spain have been upset by the Catalan separatist movement, and there’s been speculation that the Swiss could demand Falciani in return for pro-independence leaders who fled for Switzerland earlier this year. Anna Gabriel was leader of the pro-independence party CUP while Carles Puigdemont served as president, and Marta Rovira was a member of the separatist party ERC.

“Speculation that politics plays a role is justified here,” said Rebecca Niblock, partner and extradition specialist at the firm of Kingsley Napley in London. “It would be difficult to see why the Spanish would accede to the request if nothing has changed.”

On Thursday, Falciani appeared at a hearing in Madrid, where a judge turned down a request by Spanish prosecutors to hold him while the extradition request is considered. He was released without bail, while required to surrender his passport and report weekly to police.

“Mr. Falciani is doing well and ready to cooperate,” Manuel Olle, his lawyer, told reporters in Madrid after the judge’s decision was announced. “We are, however, surprised by the arrest and hope that the case sticks to the facts.”

Falciani’s theft of data on thousands of clients from HSBC’s private bank in Geneva was embarrassing to the bank, and led to his conviction.

Prison Time

In his last interaction with Spanish law in July 2012, Falciani was arrested in Barcelona and spent six months in Valdemoro prison outside Madrid as local judges mulled an initial extradition request from the Swiss. Falciani played racquetball with members of Basque Terrorist group ETA to stay fit while in custody, he told the New Yorker magazine.

“Countries can and do make repeated extradition requests but it can be seen as an abuse of the court’s process and make the request less likely to be granted,” Niblock said.

Puigdemont, himself, was released on 75,000 euros ($92,000) bail in Germany after a court declined to consider a Spanish judge’s request to have Puigdemont extradited on rebellion charges. German prosecutors earlier this week backed the recommendation that he be sent to Spain to face of trying to illegally lead Catalonia to independence.

Marc Henzelin, Falciani’s Swiss lawyer, said the substance of his client’s case hasn’t changed, and so he doesn’t expect the Spanish will react any differently this time. Falciani was convicted of industrial espionage, which is considered a political crime against the state, and acquitted of charges he violated commercial and banking secrecy rules, Henzelin said.

Spain doesn’t make banking secrecy a key part of national law, unlike in Switzerland. During his trial, it emerged that Falciani had attempted to sell the client data he stole in Beirut using the pseudonym of Ruben Al-Chidiak, before deciding to leak it to authorities.

Tax Information

The thousands of dossiers he released were subsequently shared with French, Belgian, U.S. and U.K. authorities and were behind investigations into tax evasions by those countries’ citizens. The Swiss took a narrower view of his crimes, and Falciani was given a five-year prison sentence in November 2015.

Laurent Moreillon, HSBC’s lawyer, told reporters after the trial that Falciani’s “a thief and a liar,” and that his argument he was a whistle-blower was “pure invention and is a lesson to anyone who might try the same thing.”


Nevertheless, HSBC’s Swiss unit agreed to a pay penalty of 40 million Swiss francs ($42 million) to end a probe into allegations of money laundering by the Geneva prosecutor’s office and avoid criminal charges. A spokesman for the bank on Wednesday said it had nothing to add on the news of his arrest.

The canton of Geneva, where HSBC’s private bank is based, asked the Swiss Federal Office of Justice in February 2017 to issue an international arrest warrant for Falciani given his conviction, a spokesman for the FOJ said. The agency handles all requests for international legal assistance including in extradition cases.

The day after Falciani’s arrest on Wednesday, the FOJ submitted a formal request for extradition. Spanish authorities informed the Swiss last month that the arrest warrant would be valid in Spain, the spokesman said.

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