DOJ cracks down on offshore banking

Swiss bankers indicted for helping U.S. clients hide billions from the IRS.

A concerted three-year push to curtail offshore banking practices that allow wealthy Americans to avoid taxes continued in July when the Justice Department (DOJ) announced the indictment of three Swiss bankers and an executive on conspiracy charges. The ongoing enforcement effort has leveraged thousands of individual tax evaders against the banks and bankers that have eagerly assisted them for decades.

The heat has been on the secretive Swiss since at least 2008, when a Senate panel accused Swiss banks of helping clients evade taxes by stashing billions of dollars in hidden accounts. UBS, Switzerland’s largest bank, took the brunt of the early scrutiny. The bank was criminally charged in February 2009. It quickly agreed to a deferred prosecution agreement (DPA) and paid $780 million in fines and disgorgement.

Voluntary Disclosure

In large part, prosecutors have built the cases against Swiss banks using information provided by their customers. In 2008, the IRS announced a voluntary disclosure program for U.S. taxpayers who had money in secret foreign accounts.

Sidebar: The Accused

A superseding indictment announced July 21 charged four individuals with conspiracy to help clients avoid U.S. taxes via secret accounts:

Contributing Author

Steven Andersen

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