The Crackdown on Swiss Banks Continues to Put Offshore Investors at Risk

Posted in News on November 28, 2014 | Share

The U.S. government has decided to go after tax evaders a bit more creatively by prosecuting the bankers that help make tax evasion possible. With tough new reporting requirements for banks (as well as reporting requirements for individual taxpayers with offshore accounts), the Internal Revenue Service is determined to stop people from placing money in offshore accounts to avoid U.S. tax obligations.  

Cracking down on bankers is a powerful and effective way for the government to convince banks and bankers not only to avoid helping with tax evasion, but to also reveal the names of people with offshore accounts. If you have an account and have not reported it, you need to act quickly to take advantage of voluntary disclosure programs before the government learns about your account from the banks. Contact a Washington DC tax attorney as soon as possible for help.

Crackdown on Swiss Banks (and Bankers)

In 2008, an American who worked for UBS Bank alerted the U.S. government to large-scale tax evasion facilitated by UBS bankers. He reported encrypted laptops, diamond smuggling in tubes of toothpaste for clients and bankers coming to the U.S. on tourist visas so they did not draw the attention of the authorities. Because of the revelations, UBS paid a fine of $780 million to the government and provided data on more than 4,000 clients.

This was just the beginning. Business Insider reports more than 30 individuals associated with offshore banks have been charged with criminal conduct as the U.S. launched investigations into financial institutions and financial professionals.

Just this October, jury selection began for a trial in a Florida federal court against the head of UBS’s global private-banking business.  The financial professional was arrested in Italy while on vacation and was extradited to the United States where he will stand trial for allegedly helping clients hide as much as $20 billion from the U.S. government.  Other UBS bankers are going to testify against him, some of whom will offer video testimony, because they fear arrest if they come to the United States.

Bankers and banks seeing the criminal crackdown have reason to be frightened of prosecution. Some have already cut deals with U.S. authorities by pleading guilty, but the U.S. is hoping to make examples out of high-profile bankers and send a message about tax dodging.  The authorities are not only trying to prevent Swiss banks from aiding U.S. customers from avoiding tax obligations, but they are also going after banks in the Caribbean, Singapore and Israel.

More than 100 banks have taken steps to limit their liability as the U.S. engages in this global crackdown. The banks will pay fines to avoid indictment.  Banks are also going to start exchanging information about clients on a systematic basis starting in 2018 as part of a global effort to identify tax evaders.

When banks and bankers are attacked, past evidence has shown that they do not hesitate to turn against their clients. Do not get caught up in the crackdown. Contact a Washington DC tax attorney with Thorn Law Group today for help if you have offshore accounts. 

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