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Schaffhauser Kantonalbank Reaches Resolution With DOJ Under Swiss Bank Program

Posted in Offshore Account Update on December 11, 2015 | Share

Schaffhauser Kantonalbank (SHKB) is a regional bank in Switzerland that was founded in 1883. The financial institution has recently become one of many banks to take advantage of the Swiss Bank Program. The Swiss Bank Program allows banks to voluntarily report activities they engaged in to help U.S. citizens to evade tax obligations. In exchange for coming forward and for fulfilling certain criteria, including providing information on accountholders, the bank is able to avoid being prosecuted criminally and can limit fines and penalties.

If you had funds in accounts at SHKB, U.S. authorities may have been provided your information. If you were not in full compliance with tax laws in the United States, you could face subsequent legal problems.  Accountholders of other financial institutions should also be worried about their own banks coming forward to take advantage of the Swiss Bank Program.

Accountholders do have options if they are not in full compliance with reporting offshore accounts and if they have not paid 100 percent of taxes due on offshore undeclared income. It is important to act quickly and speak with a Washington DC tax law firm if you wish to take advantage of amnesty programs for voluntarily reporting accounts, or if you otherwise need assistance with resolving tax concerns related to foreign financial accounts.

SHKB ENTERS SWISS BANK PROGRAM

Managers, employees, and other individuals affiliated with SHKB reportedly knew, or had reason to know, that accountholders with U.S. connections were not in compliance with U.S. tax laws.  SHKB also allegedly engaged in activities that helped U.S. accountholders to keep their offshore accounts from coming to the attention of the IRS. This included activities like holding mail correspondence, allowing accountholders to use code names or numbered accounts instead of using their real names, and not putting identifying details on documents that were sent to clients.

SHKB also opened accounts for accountholders who had left other banks under investigation by the Justice Department, and arranged for travel cards, debit cards, and credit cards for accountholders, which helped to facilitate access to offshore undeclared assets.  In addition to all of these activities, the bank also reportedly issued checks in amounts of less than $10,000 to U.S. accountholders to avoid triggering transaction reporting requirements, and SHKB processed withdrawals of funds for U.S. taxpayers from accounts with undeclared funds. 

In 2001, SHKB had entered into a Qualified Intermediary Agreement with the IRS, with the goal of helping to ensure U.S. taxes were paid and helping to ensure offshore income from investments was subject to proper U.S. withholding rates. However, SHKB subsequently forbade U.S. accountholders from purchasing U.S. securities and required U.S. accountholders to instruct the bank to hold their mail. This had the effect of allowing SHKB not to disclose information to U.S. authorities that should have been disclosed under the Qualified Intermediary Agreement.

Because of the myriad activities SHKB reportedly engaged in to help facilitate tax evasion, the institution was concerned about the threat of criminal prosecution. The Swiss Bank Program made it possible for the bank to pay a $1.613 million fine and to avoid prosecution- as long as the bank came forward voluntarily, turned over information on customers, and otherwise cooperated with authorities.

The Swiss Bank Program has incentivized many financial institutions to protect themselves at the cost of clients. If you are concerned your bank has turned over your info, or that it will turn over your information to U.S. authorities, act now. Contact Attorney Kevin Thorn at Thorn Law Group, a DC tax law firm, for help.


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