Zurich Bank Reaches Deal Under Swiss Bank Program| Washington DC Tax Law Firm

Posted in Offshore Account Update on August 14, 2015 | Share

Finter Bank in Zurich has become the latest financial institution to take advantage of the Swiss Bank Program. The program, announced in August of 2013, allows for Swiss banks to avoid criminal prosecution by paying fines and cooperating with authorities to provide information on accountholders.

Upon reaching the deal with Finter Bank, the Department of Justice reminded accountholders at Finter that it may not be too late to participate in the Offshore Voluntary Disclosure Program. The Offshore Voluntary Disclosure Program allows individual accountholders to avoid criminal prosecution.

Both the Swiss Bank Program and the Offshore Voluntary Disclosure program require action before a criminal investigation is initiated. While participating in the Voluntary Disclosure Program can help minimize fines and allow you to avoid criminal penalties, there are significant costs -- and the costs have become steeper. If you have undeclared offshore accounts at Finter Bank or any other foreign financial institution, talk to a Washington DC tax law firm for information about what your best course of action is for protecting yourself from financial loss and criminal consequences.

Swiss Bank Program Encourages Banks to Turn on Customers

The Swiss Bank program is open to foreign banks that could potentially face criminal consequences for helping U.S.-based customers avoid tax obligations. Finter Bank, which began operating in 1958, has maintained 283 accounts whose accountholders had a connection with the United States.

Finter acquired millions of dollars in U.S. business in August 2008, when another Swiss Bank — UBS AG — announced publicly it was being targeted for a criminal investigation by U.S. tax authorities. Following the August 2008 announcement by UBS, Finter accepted funds from UBS accountholders and ended up with U.S.-connected accounts with an aggregate maximum balance of approximately $235 million.

Finter helped clients in the United States eliminate the paper trail showing they had undeclared assets in offshore accounts. Numbered and coded accounts were used, and sham entities were created to act as nominal beneficial owners of undeclared accounts. Finter provided credit cards and cash cards linked to the undeclared accounts and used “hold mail” services to help clients access their funds without records.

For its role in facilitating tax evasion, Finter has now paid a penalty of $5.414 million to resolve potential violations of U.S. law. Finter entered into a non-prosecution agreement and will provide information to U.S. authorities about other banks cooperating in tax evasion, as well as U.S. accountholders with undeclared offshore funds.

U.S. clients with assets in foreign banks must file an annual FBAR (Report of Foreign Bank and Financial Accounts) and must pay taxes on income made from investments even if those investments are held in foreign accounts. If Finter turns over information on your undeclared accounts (or if your bank subsequently participates in the Swiss Bank Program and provides information), you could find yourself being prosecuted for tax evasion.

To determine if you can (or should) participate in the Offshore Voluntary Disclosure Program to avoid charges and limit tax penalties, contact attorney Kevin Thorn in Washington DC today for advice.

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