The US government is stepping up prosecutions of wealthy individuals dodging taxes through offshore accounts, with new cases expected to be made public “every couple of weeks,” a top government attorney said on Saturday.
US officials have been sifting through about 250 client names obtained through a February settlement of a criminal probe against Swiss banking giant UBS AG. The government had alleged the bank illegally helped US taxpayers hide funds offshore.
That effort, along with an amnesty program encouraging tax evaders to turn themselves in, is speeding prosecutions, one of the top lawyers working on the cases at the US Justice Department said.
“You can expect a few every couple of weeks,” Kevin Downing, a senior attorney in the tax division of the Department of Justice, told an American Bar Association tax conference.
On the sidelines of the conference, Downing said that US banks that helped US clients hide money offshore were a target.
“The folks in the United States that we get information on are obviously the easiest ones for us to pursue,” he said.
“So anybody in the US ... the US banks helping US clients set these offshore accounts up, we are doing the same thing” in going after them, he said.
Last month, UBS AG agreed to disclose the names of 4,450 US holders of secret accounts at the bank, ending a related lawsuit that has begun to show cracks in Switzerland’s prized banking secrecy.
“The UBS case has been a great success for the government,” Downing said. “It is not an anomaly. It is the beginning of what is now a resource-intensive” process of going after other banks and countries.
The government has secured six guilty pleas so far in its effort, including one on Friday, where a New Jersey man pleaded guilty for failing to report about US$6.1 million he had held in a UBS AG Swiss bank account.
Downing also said the government had “made a lot of headway” in dealing with foreign banks.
“Let your clients know if they think it’s just UBS, they are mistaken,” he told the group of tax lawyers.
“If we just stayed in Switzerland, that wouldn’t be fair,” Downing said, citing a recent indictment of a person with an account set up in the name of a Hong Kong corporation, and Singapore as examples of possible jurisdictions.
Another government lawyer active in the UBS cases said the publicity had engaged juries, which were becoming more sympathetic, “especially in these tough economic times.”
On a parallel track to the UBS case, the IRS last Monday extended a temporary amnesty program by three weeks to Oct. 15, to encourage wealthy Americans with undeclared assets abroad to come forward.
Those taking part in the amnesty, or voluntary disclosure, program pay reduced penalties and generally avoid criminal prosecution.
Several lawyers working on amnesty deals said the vast majority of their clients had sympathetic cases, including those that emigrated to the US with money in an account they may not have touched in years.
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