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HSBC denies knowledge of US offshore banking investigation

ZURICH (Reuters) - HSBC Holdings said it was not aware of any US investigation into offshore private banking services, after a report it had been targeted by a probe.

The New York Times reported yesterday that the US Department of Justice (DoJ) had expanded its criminal investigation into foreign banks selling offshore private banking services to include Credit Suisse and HSBC. The paper cited people briefed on the matter.

Some of HSBC's offshore private banking services are offered through the Bank of Bermuda. Efforts to contact a Bank of Bermuda spokesperson yesterday were unsuccessful.

However, the London-based HSBC put out a statement yesterday. "We are not aware of HSBC being investigated in connection with its offshore private banking services in the US and HSBC has not received any contact from the US authorities with regard to any such investigation," the statement read.

HSBC added it was confident its US business is compliant with its local regulatory requirements.

Credit Suisse also said it had no knowledge that the DoJ was investigating it as part of an ongoing inquiry into offshore services offered to wealthy American clients to help them dodge taxes, which has already engulfed rival UBS.

"We are not aware of any investigation regarding US tax issues," a Credit Suisse spokesman said. "Credit Suisse adhere to all applicable laws, regulations and policies."

DoJ spokesman Charles Miller declined to comment.

The New York Times said the investigation into HSBC and Credit Suisse began around September and is focusing on whether the two banks helped wealthy American clients hide up to $30 billion in offshore accounts that went undeclared to the US Internal Revenue Service.

The investigations are at an early stage and have not focused on any executives, though that could change as the investigations unfolds, people briefed on the matter told the newspaper.

The US authorities are seeking the names of about 17,000 US clients of UBS who have Swiss-based bank accounts, which are protected by Swiss banking secrecy laws. They have indicted UBS' global wealth management chief as part of the investigation.

UBS said last week it has uncovered a limited number of tax fraud cases and Swiss lawyers representing US clients of UBS have said Switzerland is considering disclosing information on only a few hundred.