Four Banks Reach Resolutions Under DOJ Swiss Bank Program

Posted in Offshore Account Update on October 9, 2015 | Share

The Department of Justice has created the Swiss Bank Program, which is essentially an amnesty program allowing banks to come forward and negotiate deals to avoid serious criminal penalties for helping to facilitate tax evasion. Banks pay fines to U.S. authorities and agree to provide details about their cross-border activities, as well as information about specific accounts in which U.S. taxpayers have a direct or an indirect interest.

The DOJ has announced four banks have reached settlements under this program. These banks will be turning over information about accounts owned by people affiliated with the U.S. and will be closing accounts of accountholders who do not comply with reporting obligations imposed by the Internal Revenue Service (IRS).  The banks include Société Générale Private Banking (Lugano-Svizzera), Medibank AG, LBBW (Schweiz) AG and Scobag Privatbank AG. 

Accountholders of these institutions should reach out to a Washington DC tax attorney.  Those with undeclared accounts at other offshore banks should also contact an attorney for assistance as soon as possible. If you have offshore funds, you may wish to move forward with seeking amnesty before your bank participates in the Swiss Bank Program and turns over your details to authorities, who may then come after you for tax evasion.

Banks Resolve Potential Criminal Liabilities Under DOJ Swiss Bank Program

Société Générale Private Banking was established in 1974 and has been an offshore haven for U.S. accountholders who did not always comply with tax reporting obligations.  Since August of 2008, SGPB-Lugano had approximately 109 accounts owned by U.S. accountholders. These accounts had approximately $139.6 million in assets collectively.  Services provided to accountholders helped them conceal their identities and assets from the IRS.

MediBank AG was found to have 14 U.S.-related accounts, with assets of around $8.6 million.  LBBW-Schweiz had 35 U.S. accounts with $128,666,130 in assets and Scobag Privatbank had 13 related U.S. accounts with a maximum dollar value of $6,945,700.

Even banks with very small numbers of U.S.-affiliated accounts are taking advantage of the Swiss Bank Program to address their possible criminal liability for helping to facilitate tax evasion.  There is virtually no bank of any size offshore that is immune from the threat of prosecution, so it is likely that more and more banks will be taking advantage of the amnesty opportunity.

Since cooperation with U.S. authorities to provide information on accountholders is a requirement, accountholders at all offshore institutions are at risk of having their information provided to authorities.  As Chief Richard Weber for the IRS-Criminal Investigation (CI) stated: “These four additional bank agreements signal a change in terrain for offshore banking… No longer is it safe to hide money offshore and expect that it will not be discovered.”

If you have money offshore, you may participate in the IRS Offshore Voluntary Disclosure Program (OVDP), which is an amnesty for individual accountholders.  However, participation in OVDP has already become more expensive for investors with unreported offshore accounts and individuals can participate only if they are not already under investigation.

DC tax attorney Kevin Thorn can help accountholders determine what their best course of action is to try to minimize the potential for serious financial consequences and possible criminal consequences for not reporting offshore accounts. Call an attorney before your bank gives your information to the IRS to save itself penalties.

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