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Schaffhauser Kantonalbank Resolves Tax-Evasion Involvement

Offshore Account Update

Posted on December 11, 2015 |

Schaffhauser Kantonalbank (SHKB) is a Swiss Bank that has a long history of allegedly helping U.S. accountholders to conceal income from taxing authorities in the United States. SHKB entered into a Qualified Intermediary Agreement in 2001 to make sure U.S. investors were paying their taxes on offshore income, but SHKB reportedly found ways around the agreement almost immediately-including requiring accountholders to have their mail held and prohibiting the purchase of U.S. securities.

The bank has also been accused of helping customers structure transactions with a series of checks under $10,000 to avoid reporting requirements; and of making it easier for accountholders to access or withdrawal undeclared offshore funds.

SHKB also provided a wide variety of other assistance to U.S. accountholders, including allowing the use of numbered accounts or aliases.  SHKB even reportedly created accounts for Americans who had been forced to leave other banks due to concerns the banks would turn over private information to the DOJ.

Since SHKB knew it was helping to facilitate illegal tax evasion, the financial institution was likely facing prosecution. Instead of waiting until the Department of Justice or Internal Revenue Service began an investigation or moved forward with charges, SHKB decided to take advantage of a program called the Swiss Bank Program. 

This program allows banks to report their own complicity with tax evasion and to pay a fine.  In exchange for U.S. authorities taking criminal prosecution off the table and allowing reduced fines, U.S. authorities also require the banks to provide extensive information on accountholders.  This can lead to individuals with offshore accounts facing legal action. A Boston tax law firm can provide help to clients under these difficult circumstances.

SHKB Resolves Claims of Facilitating Tax Evasion

The Swiss Bank Program has enticed many financial institutions to avoid the threat of criminal prosecution by instead selling out their customers and giving authorities information on offshore accountholders.   SHKB is yet another bank that will pay a fine, provide information about accountholders, and cooperate with investigations and requests for more details. Accountholders could find themselves under investigation and potentially facing financial penalties and even the threat of jail time for tax evasion.

While those with undeclared funds held offshore may be able to take advantage of the Offshore Voluntary Disclosure Program (OVDP), this program for investors has been imposing ever-harsher financial consequences even for voluntarily disclosing undeclared offshore funds. OVDP may still be preferable to the consequences of not coming forward on your own, but you should act quickly to find out if this option is right for you.

You can enter into OVDP if you are not yet under investigation already -- so you will need to act fast if you were an SHKB customer or if you suspect your own bank has (or will) make a deal with U.S. authorities. Thorn Law Group, a tax law firm in Boston, can carefully evaluate the many factors that are relevant to your case to help you determine if you should participate in OVDP. 

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


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