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Is Your Banker Under Investigation for Helping with Tax Evasion?

Offshore Account Update

Posted on November 28, 2014 |

If you have money offshore in a bank in Switzerland, Israel, the Caribbean, Singapore or other countries, your banker and bank may soon be under investigation, if they are not already. The U.S. government is cracking down on tax evasion and they are going after banks and financial professionals with the hope that criminal prosecutions will convince these institutions to turn over customer data. So far, the strategy seems to be working.

If your bank or banker provides your information to the U.S. government and you have unreported offshore accounts, you could find yourself facing fines and maybe even criminal prosecution. You need to act before your information is turned over to the government so you can take advantage of voluntary disclosure programs. A Boston tax attorney can provide you with advice and assistance on how to protect yourself from legal trouble.

Your Banker May be Under Investigation

Business Insider has reported large-scale crackdowns against banks in Switzerland and worldwide. The movement to take action against banks began when an American employee of UBS Bank reported his company for facilitating tax evasion. Apparently, bankers were smuggling diamonds for clients, using encrypted laptops and coming to the U.S. on tourist visas to avoid detection.

UBS paid a fine of $780 million for its efforts to help clients avoid their tax obligations. UBS also gave the U.S. government data on more than 4,000 clients. 

Since that time, more than 30 financial professionals have been charged with criminal conduct and more than 100 small and mid-size banks have entered into arrangements with the U.S. government where they paid fines to avoid indictment. Several other big banks are also under investigation but have been blocked from making deals thus far.

The head of UBS’s global private-banking business was also arrested while on vacation in Italy and this October, a jury was chosen for his upcoming trial for helping to facilitate tax evasion. He has been accused of overseeing a team that helped U.S. clients hide more than $20 billion.  Other UBS financial professionals who are frightened of being the next to be arrested will be testifying against him via video testimony because they do not want to set foot on U.S. soil.

As banks and bankers get caught in this crackdown, many more will likely turn over information on clients in order to save themselves from jail time. Even if your banker or bank is not among those that turn over your information due to threats of prosecution, financial institutions are going to start systematically turning over tax information starting in 2018 as part of an international agreement to help fight tax evasion.

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


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