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Two Banks Decide to Provide Account Information as Part of the Swiss Bank Program

Offshore Account Update

Posted on February 12, 2016 |

The Swiss Bank Program was created to encourage offshore financial institutions to come forward, voluntarily report how they aided in tax evasion, and provide information to U.S. authorities about both accountholders with undeclared funds, as well as other financial institutions that engaged in transactions with these accountholders. 

The banks that take advantage of the Swiss Bank Program pay penalties and give up enough details on accountholders to be actionable, as well as agree to cooperate with treaty requests for information. In exchange for doing all of this, the banks can enter into non-prosecution agreements and avoid facing criminal charges.

Many financial institutions have taken advantage of the Swiss Bank Program. This December, two additional banks joined the list: Edmond de Rothschild (Suisse) SA and Edmond de Rothschild (Lugano).  These institutions are part of Edmond de Rothschild Switzerland and are known as EdR.  The banks collectively had approximately 950 U.S. affiliated accounts, which held a total of $2.16 billion in assets. All of these accountholders have now had their information provided to U.S. authorities. 

EdR joins many other financial institutions in making the decision to give up details on their customers. For accountholders with undeclared funds in offshore banks, it is only a matter of time until their own financial institutions decide to participate in the Swiss Bank program.  Calling a Boston tax evasion attorney is a smart choice for anyone with offshore funds, whether their bank is part of the Swiss Bank Program or not. There may be options for reducing the possible consequences of not declaring offshore accounts, so act before you are under investigation.

Two More Offshore Banks Turn On Accountholders

The two Edmond de Rothschild banks have agreed to pay penalties of a little over $45 million.  The banks are paying these penalties because they are accused of helping facilitate tax evasion for more than a decade by allowing accountholders to use coded accounts; holding mail for accountholders; facilitating the use of sham entities as account owners; assisting with repatriating money and structuring transactions to avoid reporting requirements. 

EdR also reportedly assisted accountholders with divesting securities from undeclared offshore accounts owned by U.S. affiliated individuals so the bank could undermine its Qualified Intermediary (QI) agreements with the Internal Revenue Service.

Details on all of their activities have been provided to U.S. authorities, including information on what other financial institutions facilitated money transfers and other transactions. A condition of participation in the Swiss Bank Program is that details about accountholders are provided on an account-by-account basis.  The information provided must give U.S. authorities enough information to be actionable; which means it must make it possible for the IRS to go after specific accountholders.

Anyone in the U.S. who had offshore accounts can face significant legal trouble just for not reporting they had funds offshore. If you have not filed annual FBARs or if you have any undeclared offshore income, you need to act quickly to find out what you can do to reduce financial penalties and avoid criminal prosecution.  Contact tax evasion attorney Kevin Thorn today to learn more about your options.

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

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