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10 Jul 2012
IT'S A MORAL QUANDARY. Is it right to do something good on the back of information gleaned through illegal means?
On the one hand, you are doing something positive and – ostensibly – decent, but on the other, you have validated an act of wrongdoing.
Further reading
That is a situation in which the taxman potentially finds itself at the moment.
Back in 2010, a disgruntled IT worker named Hervé Falciani stole a disc from HSBC in Geneva containing the details of 6,000 UK customers. His flat was later raided by French police, who confiscated the disc. It was then passed on to the French revenue, which went on to share the details with its opposite number this side of the Channel, instead of returning the information to the Swiss.
That evidence was used to find property millionaire Michael Shanly guilty of tax evasion, after he held his late mother's money in an offshore account and chose not to disclose it to HM Revenue & Customs. Eventually, he pleaded guilty and was hit with an £800,000 bill.
It is at this point that things start to get tricky. The issue of whether evidence gleaned through a separate criminal activity is admissible is a source of contention for the courts, and in this case there is the added complication of the crime's occurrence abroad.
There is a compelling case to be made for not permitting its use. Given the illegal way in which this information came to light, its use, in the eyes of many lawyers, is not lawful.
However, much to the shock of some experts, including BCL Burton Copeland's Harry Travers, HMRC are seriously pressing ahead with the utilisation of the data.
The taxman shouldn't have been allowed to use the data as the key plank of their case against Shanly, because it should be treated as inadmissable.
Of course, the counter-argument – which in itself is also relatively strong – is that the information demonstrates that a crime has been committed, and money that may otherwise have been withheld is due to the Revenue and can be recouped.
It would also appear that HMRC's use of the data put the onus on other parties to challenge its admissability.
Indeed, as some point out, it represented the ideal opportunity for the taxman to bare its teeth and demonstrate it will prosecute evaders – just as it said it would.
There will be few that have sympathy for Shanly in light of the circumstances of the case. As such, it is not hard to not to see why the Revenue might have taken the chance.
There are likely to be circumstances in the near future where the taxman will have to answer the questions, moral or legal, about its use of stolen information.
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Visitor comments Add your comment
Omission
"In light of the circumstances of the case" You omitted to mention that Michael Shanly did not receive or benefit from the money from the Swiss Account. It was his mothers money that went straight from her account to charity.
Posted by: Dilly, 16 Jul 2012 | 17:29
Well done HMRC!
If a child abuser was mugged and the perpetrator stole a wallet containing cash and lists of other child abusers - how many people would seriously object to the Police following these names up if handed in or if the mugger was caught? Okay it's taking things to the extreme but you see my point!
Posted by: David, 18 Jul 2012 | 08:47
Swiss morals
Hervé Falciani sounds is more a whistle blower rather than a thief.
Using the data on the disk as the sole evidence to bring a prosecution may carry the risk of the evidence being ruled inadmissable, but I fail to see what is morally wrong in using this data to identify UK residents who are illegally evading tax and then looking for further lawful evidence to recover the amounts withheld.
What about the morals of a nation state enabling foreign nationals to avoid tax (and worse) in their resident countries by refusing to disclose financial details?
Posted by: Jack, 19 Jul 2012 | 09:29
Obtaining unlawfully data is not "theft"
Theft is about taking the property of others with the intention of permanently depriving the owner possession thereof.
Copying date whether with or without permission is therefore not theft because you have not deprived the owner of possession of his data. If Falciani took a laptop ( belonging to a bank) the at worst he is guilty of stealing a gadget worth perhaps a few hundred bucks. If it is his first crime that should merit at worst a small fine or perhaps suspended prison sentence of a couple of weeks. The data on the laptop is irrelevant to the theft. Concerning his unauthorized acquisition of data, if his intention was to expose criminal activity then he has a perfectly valid defence. When you make a citizen's arrest you are also entitled to seize evidence connected with the case.It shoukd of course be handed to the authorities ( normally the police). If you think that a particular police force was not to be trusted because they are in on a conspiracy to protect lawbreakers ( tax evaders), you should be prefectly justified in picking carefully who the evidence is handed over to.
I find in favour of the accused and order the arrest for joint conspiracy to conceal a crime of tax evasion of those seeking to arrest Falciani
Posted by: Peter, 25 Jul 2012 | 17:24