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Offshore Bank Settlement Reached Between DOJ and Bank J. Safra Sarasin

Posted in Offshore Account Update on March 25, 2016 | Share

Bank J. Safra Sarasin AG is a Swiss Bank that first formed in 2013 through the merger of two other Swiss financial institutions.  With branches in Geneva, Berne, Lucerne, Zurich, and Lugano, Safra Sarasin is a formidable presence in the offshore banking industry. It also just sold out its customers to the Department of Justice so it wouldn't be prosecuted for its own role in helping U.S. citizens evade their tax obligations to the IRS.

Bank J. Safra Sarasin AG agreed to give up private customer information, including specific details about accounts and transactions, because the bank was concerned it would be prosecuted. It joins an ever-growing list of financial institutions that have decided to put accountholders at risk of IRS action in exchange for limiting their own liability.  All of the banks that have made this choice are taking advantage of the Swiss Bank Program.

If you have undeclared offshore funds, your bank may have already begun negotiating a deal with the DOJ or may be on the cusp of deciding to become part of the Swiss Bank Program. The ability to avoid criminal prosecution is a powerful incentive for banks to come forward.

Unfortunately, if you are an investor, you could end up facing a criminal case against you if the IRS gets information from a bank and decides to prosecute you for your failure to follow US tax laws.  That said, you need to speak with a Washington DC criminal tax lawyer about ways to avoid being charged or to fight charges for tax evasion.

BANK J. SAFRA SARASIN AGREES TO PROVIDE JUSTICE DEPARTMENT WITH ACCOUNTHOLDER DETAILS

The Swiss Bank Program creates an amnesty from criminal prosecution for offshore banks willing to meet certain requirements. The banks have to pay a penalty which the Department of Justice indicates is $85.809 million for Bank J. Safra Sarasin AG. The fines are determined, in part, by the aggregate value of the money being held offshore improperly by U.S.-based accountholders. There was an estimated $2.2 billion in accounts connected to U.S.-based individuals that were held at Bank J. Safra Sarasin AG.

In addition to paying penalties, the banks have to agree to cooperate with the DOJ and the IRS. To cooperate, they have to provide extensive information, including details on the accountholders, the transactions that took place, the value of the accounts and the other financial institutions that were making transfers. With the information the banks provide, the DOJ and IRS can begin investigating accountholders and eventually taking action against individuals who didn't disclose offshore accounts and didn't pay taxes on all their offshore income.

Bank J. Safra Sarasin AG has agreed to the terms of the Swiss Bank Program, mainly because of concerns the institution could be criminally prosecuted if no settlement with the DOJ was reached.  The bank could potentially have faced criminal charges for tax evasion because it did many different things to facilitate tax evasion, such as helping clients open undeclared accounts titled in the names of Panama corporations; setting up nominee entities for undeclared accounts; falsely signing IRS forms certifying Panama entities as taxpayers instead of U.S. clients and transferring funds from closed accounts to banks in Hong Kong, Israel and Liechtenstein. 

You should not wait until your bank turns over your account information, as there may be options for voluntary disclosure that can limit penalties; however, they will no longer available once the IRS has begun to act against you. Contact Kevin Thorn, a Washington DC criminal tax lawyer, about voluntary disclosure and other options for responding if you are concerned your undeclared offshore account will come to the attention of authorities.


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