HSBC, Israel and blood diamonds

Jewish leaders are fond of boasting that their community has high moral standards and is a ‘light unto the nations’ compared to the evil and wicked West. The HSBC leaks scandal allows us to take a close look at Jewish involvement in what must surely be one of the most immoral trades in the world today — the illegal trafficking of ‘blood diamonds’.

This blood-drenched trade, together with arms smuggling, has led to the deaths of millions in central African countries such as Sierra Leone, Angola, Liberia, Ivory Coast and the Congo.  Armies such as Sierra Leone’s Revolutionary United Front have fought with weapons of massacre and mutilation in civil wars which are often fomented and controlled by outsiders.

The HSBC leaks confirm it is a trade in which Israeli dealers are market dominant.  The HSBC leaks also there are no shortage of banking expertise when it comes to the confidential looting of poor countries and the dodging of tax in wealthy ones.

Take, for instance, one Israeli-American HSBC account holder called Asher Gertler. He is considered close to Israeli government figures. Gertler’s activities in the Democratic Republic of the Congo have generated a great deal of criticism over the years, with nongovernmental organizations accusing him of acquiring mining rights in that country based on his ties to President Joseph Kabila.

In 2013, Gertler was caught on his private plane with cash-filled envelopes on his way back from the Congo. Customs officials suspected that he aimed to avoid reporting the income, and was ultimately fined about 8,000 shekels ($2,000).

And then there is a Belgian-Israeli diamond tycoon called Erez Daleyot. The Irish Times reported that he paid a visit to his HSBC bankers in 2005 and told them the following year’s revenues  would be $1 billion. He’d recently obtained a tax ruling from Israel allowing him to pay just 5 per cent in taxes on $85 million in earnings. Visiting Geneva to buy a $41.5 million private jet, he invited his bankers to the airport to show it off. But now he is under investigation by US tax authorities for money laundering and tax fraud. He has been accused of paying $20 million in bribes to the Antwerp Diamond Bank.

According to the Irish Times , HSBC were willing to help ‘blood diamond’ smuggler Emmanuel Shallop although they knew he was being investigated over tax evasion. Emmanuel Shallop traded conflict diamonds for Revolutionary United Front (RUF) leaders in Sierra Leone and earned a mention in a United Nations report for doing so.

According to one internal HSBC memo on Shallop’s account seen by the Guardian, one HSBC staffer wrote ‘The client is currently being very careful because he is under pressure from the Belgian tax authorities who are investigating his activities in the field of diamond tax evasion.’ This did not stop HSBC from helping him open a bank account in Dubai.

It turned out that several of HSBC’s diamond clients would indeed soon be leaving Belgium. Among them were Richard Davidovici, Kenneth Lee Akselrod and Mozes Victor Konig, who are fugitives wanted by Interpol for various alleged crimes in Russia, including fraud, smuggling and tax evasion.

Belgium, to its credit, began clamping down on the diamond traders’ financial scams.  In 2005 they were after a German-Belgian national called Fisi Daskal, whose internal HSBC account notes that he was setting up a Panamanian banking facility to elude the authorities. HSBC noted that this client “was worried that “the climate in Antwerp remains very hostile. No longer wants us to call him; wiretapping continue[s] in the market … has very concrete plans to leave Antwerp within 6 months. … Confirms that many diamond office[s] are in the same state of mind and construct similar plans.”

This suggestion that others were about to flee might refer to another Israeli-Belgian diamond company called  Omega Diamonds run by Sylvain Goldberg, Robert Liling, and Ehud Arye Laniado. Again the three had to flee fled Belgium after a whistleblower tipped off authorities to a money laundering and tax fraud scheme.

Belgian tax authorities raided Omega’s offices, seizing $125 million worth of blood diamonds. While the company eventually reached an agreement to pay a $195 million settlement in that case in 2013, the largest ever involving a Belgian company, it is still under criminal investigation in the country for the multibillion-dollar import-fraud scheme. Belgium said Omega owes it an astonishing €4.6 billion.

“Neither Mr Laniado nor Mr Goldberg nor Omega Diamonds were prosecuted before a court of law for tax offences,” says a spokesperson for Laniado and Goldberg. “The tax dispute between Omega Diamonds and the Belgian tax authorities was settled in an amicable civil settlement.” Mr Liling could not be reached for comment by the Irish Times.

The HSBC files list Mr Goldberg and Mr Liling as beneficial owners of a Liberian company cited in a 2000 United Nations report for illegal exporting possibly connected to conflict diamonds.

Mr Goldberg and Mr Laniado were also partners in Ascorp, the Angolan diamond monopoly controlled by Russian-Israeli billionaire diamond dealer Lev Leviev, who is of course another client of HSBC Suisse. Ascorp also boasted, as a shareholder, billionairess Isabel dos Santo, the daughter of the Angolan dictator and reputedly the richest woman in Africa.

The Irish Times report that also in the files is Dan Gertler, an Israeli diamond dealer and close friend of Congolese president Joseph Kabila and son of the above-mentioned Asher. He reportedly got his big start trading arms for diamonds in African civil wars during the 1990s in violation of UN embargoes. A 2001 UN Security Council report found “very credible sources” who told of a secret deal that, in exchange for a sweetheart deal giving Mr Gertler a monopoly on diamond rights in the Congo, the Israeli “agreed to arrange, through its connections with high-ranking Israeli military officers the delivery of undisclosed quantities of arms as well as training for the Congolese armed forces”.  His London lawyer denies this.

One of the largest deposits at HSBC is controlled by yet another Israeli diamond trader called Daniel Steinmetz and family. Steinmetz family members appear to have controlled accounts containing nearly half a billion dollars at the bank in 2006–2007. One excited HSBC banker noted with an exclamation mark that an inactive account belonged to the Daniel Steinmetz group and that the bank expected much new business from him in the next year.

HSBC is also connected to Daniel Steinmetz’s brother Beny who in 2008 pulled off one of the biggest deals of all time when he persuaded the dictator of Guinea, on his death bed, to sign over to him iron-ore concessions worth $2.5 billion. This in a country with an entire GDP of $4.5 billion. Israel-passport holder but Swiss resident Beny has been investigated by a number of agencies including the FBI, on forgery allegations and that he tried to persuade the dictator’s widow to destroy documents.

The activities of Jewish traders in the blood diamond trade almost give us a textbook example of Jewish group behaviour.  There is the firmly ethnocentric approach to business with close associates restricted to extended family and fellow Jews. There is predatory behaviour against vulnerable and easily exploited populations. There is a ruthlessness to doing business without any regard to ethics or even human life. The blood diamond business is probably not what David Brooks had in mind when he wrote his boastful New York Times article celebrating Jewish achievement.