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DOJ Settles With Bank J. Safra Sarasin

Offshore Account Update

Posted on March 25, 2016 |

The Swiss Bank Program provides an opportunity for banks that facilitated U.S. tax evasion to avoid being criminally prosecuted. The banks can come forward to voluntarily report their involvement with helping U.S. accountholders hide money offshore.

While the banks will have to pay a fine, they won't face criminal penalties and the financial penalties will generally be much lower than if they did face criminal prosecution after an investigation by the Justice Department.  The banks will, however, have to provide specific details about accounts and accountholders.

Just recently, Bank J. Safra Sarasin entered into a settlement agreement with the Department of Justice. This means that any investors with offshore accounts at this bank can now expect to have their information provided to U.S. authorities.

Consulting with a Boston criminal tax lawyer is advisable to explore options before the IRS uses the details provided by Bank J. Safra Sarasin to begin a claim against you for tax evasion.  As more and more banks participate in the Swiss Bank Program, other investors also need to be aware their information could be turned over and, accordingly, they should explore their options.

Another Swiss Bank Cooperates with DOJ

Bank J. Safra Sarasin will be paying a penalty to the DOJ of $85.809 million.  The penalty is based on the aggregate value of U.S. accounts held at the offshore bank.  Since August of 2008, the aggregate value of accounts at Bank J. Safra Sarasin was approximately $2.2 billion.  There were 1,275 accounts at this offshore Swiss bank. The DOJ and IRS now have information on all these accounts.

Investors with undeclared offshore accounts can avoid being criminally prosecuted and can limit fines by participating in the Offshore Voluntary Disclosure Program (OVDP), which provides amnesty for individuals in a similar fashion as the Swiss Bank Program does for financial institutions. The catch is, fines have to be paid. Unfortunately, for investors with accounts at Bank J. Safra Sarasin, those fines are now higher. 

According to the Justice Department, since August of 2014, the penalty for U.S. accountholders who come forward and report offshore accounts voluntarily has been raised to 50 percent of the high value of accounts if their account was kept at a financial institution that has “been publicly identified as being under investigation, the recipient of a John Doe summons or cooperating with a government investigation, including the execution of a deferred prosecution agreement or non-prosecution agreement.” 

A criminal tax lawyer like Kevin Thorn can advise you on whether you should report your account voluntarily through the OVDP. Even if you are one of many investors whose financial institution has taken advantage of the Swiss Bank Program like Bank J. Safra Sarasin has done, you may still face less legal risk and less financial loss through voluntary disclosure.

If your financial institution isn't yet under investigation or has not yet entered into an agreement with the DOJ, you may wish to act quickly and take advantage of OVDP before you end up subject to the higher penalties.  Act quickly, as the number of banks participating in the Swiss Bank Program is ever increasing. 

For a consultation, contact Kevin E. Thorn, Managing Partner, at ket@thornlawgroup.com or (617) 692-2989


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