Wary bank cuts losses over lawyer
New money-laundering rules appear to be making local banks more picky about their customers. HSBC has written off the debts of a controversial Italian, who has dealt with Saddam Hussein and met Osama bin Laden
A controversial Italian lawyer who has done business with toppled Iraqi dictator Saddam Hussein says HSBC has written off his overdraft and credit-card debts in England after refusing to let him open a bank account in Hong Kong.
Details of Rome-based lawyer Giovanni Di Stefano's rejection by HSBC were first revealed by the Sunday Morning Post in December 2001 after it emerged that bank chiefs had carried out secret background checks leading them to rescind an earlier decision welcoming his business.
Money-laundering experts say the bank's latest decision - confirmed last week - is based on the United States' Patriot Act, which came in the wake of the September 11 terrorist attacks and led to heightened security requirements for banks, some of which are due to be tightened further this year.
Speaking from Tenerife last week, Mr Di Stefano said: 'In short, HSBC wrote off both mine and my son's overdraft and credit card amounting to about #8,000 [HK$99,200]. I have pressed them to go to court over this, but they prefer to simply write it off.
'I contacted them only last week to send me the bill but they said they had written it off. They do not want litigation and that is that.'
Documents show HSBC rejected the lawyer's application to open an account just days after telling him it would be 'very pleased' to have his business.
Secret checks not only revealed a connection to Mr Hussein, but showed that Mr Di Stefano had once met Osama bin Laden.
Mr Di Stefano, 56, admitted that the bank's findings were accurate and confirmed he was also a lawyer for assassinated Serbian warlord Zeljko Raznatovic, better known as Arkan. But he insisted that his list of clients should not affect his ability to bank.
The HSBC account, which he has held for a short time in England, and one held for eight years by his son, who is studying law at Cambridge University, were terminated.
In support of their decision, HSBC sent Mr Di Stefano newspaper clippings detailing his links to bin Laden, Mr Hussein and Arkan, but added it was under no legal obligation to tell him why it did not want his business.
In a letter, Mr Di Stefano told the bank: 'I am a criminal lawyer and I will defend anyone, without exception, who requires the services of a defence.
'The ethical requirements of my profession are such that, subject to availability, I am precluded from refusing a defence case. That does not mean that I support the activities of those I defend.'
He said he wanted to open an account at HSBC's Queen's Road branch in Central as he might need work in Hong Kong in the future.
HSBC refuses to say why it reversed its original decision and turned down the application, saying only that it was executing a policy of 'know your customer'. It also refused to detail its procedures for vetting customers.
The lawyer's name does not appear on lists of suspected terrorists or terror-linked individuals which have been made public.
Mr Di Stefano showed the Post a letter of rejection dated November 22 from HSBC Hong Kong office manager Richard Brown.
It included four newspaper articles linking Mr Di Stefano to bin Laden, Mr Hussein and the murdered Arkan, whose paramilitary force - known as the Tigers - was responsible for hundreds of deaths in the Croatian and Bosnian wars. Arkan himself was the subject of a sealed, secret International Criminal Tribunal indictment for crimes against humanity in the former Yugoslavia.
A letter from HSBC sent 13 days before the rejection said the bank would be 'very pleased' to open an account for Mr Di Stefano.
HSBC has refused to comment on the letters, but a source confirmed they were authentic.
Mr Di Stefano says he met bin Laden in the lobby of the five-star Al-Rashid Hotel in Baghdad in March 1998 - five months before the suicide bombings on American embassies in Nairobi and Dar es Salaam.
At the time, Mr Di Stefano, who carries an Italian and Yugoslav passport and has a Yugoslav wife, was with former Iraqi foreign minister Tareq Aziz - who last week gave himself up to US authorities - negotiating a contract to represent Iraqi Airlines in Yugoslavia and Italy.
Mr Di Stefano was arrested in Italy in November 1999 and later freed without trial after an extradition request from British police investigating the collapse of a hotel chain.
Peter Gallo of Hong Kong-based money-laundering specialists Pacific Risk said: 'The writing off is interesting. Obviously they have made a financial decision that it makes more sense to take the loss on the overdraft and credit cards than to expose themselves.'
A spokesman for HSBC declined to comment on the latest developments.
