Government Investigating HSBC Clients for Tax Evasion

The Justice Department is investigating HSBC (HBC) clients who may have failed to disclose information about accounts held in India and Singapore, Bloomberg News reported, without naming its sources.

At least one client received a letter from the Justice Department saying the department had reason to believe the person held accounts overseas without reporting them to the IRS. The letter did not mention HSBC.

"It's clear that the IRS and the Department of Justice are intending to pursue other depositors outside of Switzerland," Barbara Kaplan, a tax lawyer at Greenberg Traurig LLP, told Bloomberg News. "They've announced it before, and they are moving forward in that regard."

Last year, Swiss bank UBS (UBS) avoided prosecution by admitting it helped people avoid paying taxes from 2000 to 2007. The bank paid $780 million and agreed to disclose information on over 4,500 clients. Seventeen UBS clients and two bankers have been prosecuted since then.