Swiss banks have taken part in a long-standing practice of secrecy that people throughout the United States have taken advantage of in order to avoid reporting income and paying taxes on some investment income.  

Banks can be prosecuted by U.S. authorities for failure to report offshore accounts, for failure to report suspicious transactions, for processing suspicious transactions, and a host of other criminal acts. Many of the criminal acts that banks are prosecuted for involve the financial institution facilitating wrongdoing on the part of customers with which it is conducting business. 

Federal authorities take tax evasion seriously and are increasingly pursuing criminal charges against those who hid offshore accounts. Just recently, the CEO of Atlanta-based Circlenet, LLC was sentenced to four months incarceration in a federal prison for having undeclared income and offshore accounts that he had not declared. 

Bradley Birkenfeld is a whistleblower. In 2007, he began providing information to the United States government about activities that were going on at UBS AG. Birkenfeld provided documents, testimony and other information to U.S. authorities demonstrating that UBS AG was using the strict banking privacy laws in Switzerland to help U.S. citizens hide funds in offshore accounts and evade their tax obligations in the United States.

Federal authorities are going after not only banks, but also individual bankers and financial advisors who may have helped U.S. clients to evade their income tax obligations.  Just this past February, a superseding indictment was handed down against financial advisors who worked for Wegelin, one of Switzerland’s oldest banks.