The former chief executive of the bank's Swiss private banking arm, Peter Braunwalder, pleaded guilty to helping wealthy clients hide assets worth at least $1.8bn as French prosecutors ramp up their fight against white-collar crime.
The banking giant was accused of failing in its supervisory role over its private banking division, but further investigation led to suspicions that HSBC "participated actively in the fraudulent practices".
Peter Braunwalder was fined €500,000 and given a one-year suspended jail sentence, according to a Paris court ruling on the plea. The 68-year-old admitted that he took part in helping clients evade taxes between 2006 and 2007 by opening clandestine Swiss bank accounts and setting up offshore trusts or providing fake loans, Bloomberg reports.
The case began when French authorities in late 2008 received files stolen by Herve Falciani, a former HSBC employee, whose disclosures sparked the so-called "Swissleaks" scandal on bank-supported tax evasion.
The former HSBC executive also pleaded guilty to illegally approaching French residents to encourage them to shift funds to Switzerland during the period, according to the previously unreported French ruling dated Jan. 29 and released this week. Braunwalder retired from his role at HSBC a decade ago.
French investigators dropped charges targeting another suspect in the HSBC Private Bank case.
The Braunwalder guilty plea comes after HSBC agreed to pay nearly €294m ($329m) to settle a Belgian criminal probe into allegations it helped wealthy clients dodge hundreds of millions of euros in taxes.
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