Edmond Safra sold his holdings in Republic New York Corporation and Safra Republic Holdings — specialized in private banking — to the British banking giant which took their “wealthy international clients” and transferred them to the HSBC private bank, which it established in Switzerland in 1999.
According to the Swiss Leaks project conducted by the International Consortium of Investigative Journalists (ICIJ), Safra received $10.3 billion in cash for his holdings.
The descendant of a Jewish banking dynasty in Syria, Safra, a Brazilian national, established banks across Brazil, Switzerland and the US.
After he sold his holdings to HSBC, information leaked from the bank showed Safra was linked to seven HSBC accounts, four of which closed between 1999 and 2006 and which held as much as $5.3 million by 2006-07, Swiss Leaks says.
This was just a small fraction of his wealth, which was apparently kept in other financial institutions.
As of 2006-2007, Safra’s wife Lily Safra had access to a numbered account set up less than a month after Safra’s death in 1999 and to various other accounts linked to her husband.
One of the accounts held up to $5.3 million in 2006-07, according the leaked data.
A spokesman for Lily Safra told ICIJ that any accounts held by her or the Edmond J. Safra Foundation “would have been opened solely for normal, legal purposes of managing family and business matters”.
Safra died at the age of 67 in a bizarre fire at his luxury penthouse in Monaco, known as a tax haven for the rich.
His American nurse was convicted for deliberately setting the fire, in the hopes of staging a rescue and becoming a hero.
She was sentenced to ten years in jail.
HSBC said in a statement to ICIJ that its Swiss private bank was largely acquired through its transaction with Safra.
It said the Republic/Safra business "focused on a very different client base and had a significantly different culture to HSBC".
It blamed the fact the business acquired was not fully integrated into HSBC for "allowing different cultures and standards to persist".
HSBC said "too many small and high-risk accounts were maintained" and it acknowledged that "the compliance culture and standards of due diligence in HSBC’s Swiss private bank, as well as the industry in general, were significantly lower than they are today".
Safra is one of 61 people profiled by the Swiss Links project as account holders at HSBC’s Swiss banking arm.
The list includes politicians, businessmen, industrialists, an alleged arms dealer, diplomats, sports figures and celebrities.
Among those named were designer Diane von Furstenberg, who told the ICIJ the accounts were inherited from her parents, and model Elle Macpherson, whose lawyers told the ICIJ she was fully in compliance with UK tax law.
Motorcycle racer Valentino Rossi, listed as having $23.9 million in two accounts, said he had regularized his tax situation with Italian authorities.
Formula One businessman Flavio Briatore is connected to 38 bank accounts that held as much as $73 million between 2006-2007, according to the ICIJ.
The information is culled from files leaked to the French government by IT expert Hervé Falciani, a former employee of the Geneva bank, and shared with other countries in 2010, leading to a series of prosecutions for tax evasion.
The files were subsequently obtained by French newspaper Le Monde, which shared the information with ICIJ.
For more information about the Swiss Leaks project, check here.