JP Morgan whistleblower Hernán Arbizu, who revealed tax evasion scheme, to be extradited to U.S.
Former Vice President at JP Morgan Argentina Hernán Arbizu, who in 2008 became one of his country's most significant whistleblowers, was taken into custody yesterday for voluntary extradition to the United States. Arbizu will be arrested as soon as he arrives in the U.S., where he faces charges of bank fraud, identity theft, and embezzlement.
The former JP Morgan banker will be held until next Wednesday, when he will travel to the U.S. with two FBI agents and his lawyer, Sebastián Nanini. Arbizu had always rejected the idea being extradited - but changed his mind following the election of right-wing President Mauricio Macri last November.
“He willingly said he wanted to be tried in the United States,” his lawyer told the Herald yesterday. “He has no pending investigations against him in Argentina.”
Arbizu first made headlines in June 2008, when he went public on how JP Morgan Argentina facilitated tax evasion for numerous Argentine firms and wealthy clients; as a senior private banker, he alone managed 13 such accounts with over $200 million between them - and had information on Argentine accounts totaling $1.3 billion.
The largest accounts belonged to Ernestina Herrera de Noble and Héctor Magnetto (the chairwoman and CEO of the Clarín Media Group, respectively) and the late María Amalia Lacroze de Fortabat and her estate executor, Congressman Alfonso Prat-Gay - who transferred over $1 billion from the sale of Fortabat's cement firm Loma Negra to tax havens by way of JP Morgan in 2008. Prat-Gay was appointed Finance Minister by President Macri upon taking office six months ago.
Arbizu's congressional testimony was further confirmed by the 2014 SwissLeaks scandal, which revealed that HSBC Argentina had facilitated tax evasion on $3.8 billion by over 4,000 local account holders. He testified that HSBC Argentina had in fact been JP Morgan Argentina's chief partner in the scheme, which began in 2000 and caused lost tax revenue of at least 60 billion pesos (around $15 billion, using the average exchange rate since 2000) on $85 billion transferred to offshore accounts.
Judge Sergio Torres initially took Arbizu's statement in 2008 and ordered a raid on JP Morgan’s offices in Buenos Aires, seizing documents. The case, however, never moved forward. Arbizu claimed Torres was pressured by lawyers and two FBI agents working at the U.S. Embassy in Buenos Aires who spoke to the judge and asked him to stop investigating.
An example
Arbizu admitted to forging the signature of the former Musimundo music retail chain owner Natalio Garber, a client of the bank, in May 2008 in order to transfer part of Garber’s funds to Paraguayan accounts. Arbizu offered JP Morgan confidentiality over the sensitive information he had on some account holders - including a complete list of JP Morgan's clients across Latin America - in order to be tried in Argentina; but JP Morgan rejected the deal.
“JP Morgan’s hatred against me can be compared to the one has against an infiltrator. I had been nominated to become the bank’s Latin America representative and I had a great relationship with my boss. Now they want to make an example out of me,” Arbizu told the Herald last year.
Argentines are estimated to have up to $400 billion abroad in accounts and investments, over 90% of which is undeclared. “If you go to the lobby of any major hotel in the country,” Arbizu said, “you’ll find a bank representative and his client closing a deal.”
At: http://buenosairesherald.com/article/216333/ex-jp-morgan-banker-taken-into-custody-before-us-extradition
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