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Bank Reaches Agreement With DOJ

Offshore Account Update

Posted in on March 25, 2016

Bank J. Safra Sarasin AG allegedly helped to facilitate tax evasion by U.S. citizens. The Swiss bank helped U.S. clients title their offshore accounts in the names of Panama corporations and it falsely signed IRS forms certifying these accounts were owned by Panama entities so U.S. taxpayers wouldn't have to report them. The bank also helped set up nominee entities for U.S.-connected accounts which were undeclared. When the bank came under suspicion for these and other efforts at aiding in tax evasion, it helped U.S.-connected accountholders transfer money to other offshore banks in Israel, Liechtenstein and Hong Kong.

Bank J. Safra Sarasin AG could potentially have faced criminal prosecution for doing all of these things. Instead, the bank decided to protect itself by taking part in the Swiss Bank Program. The Swiss Bank Program gives offshore banks amnesty from being criminally prosecuted and allows them to settle with the Department of Justice.  One condition, though, is that accountholder info has to be provided to the DOJ and IRS.

If you have undeclared money offshore with Bank J. Safra Sarasin AG, the IRS and DOJ now have enough details to investigate you for tax evasion.  You aren't alone – many banks have already participated in the Swiss Bank Program and many more will.  All accountholders concerned about the possibility of criminal prosecution for tax evasion connected with offshore accounts should speak with a New Jersey criminal tax lawyer to find out about options, such as participation in the Offshore Voluntary Disclosure Program.

Bank J. Safra Sarasin AG Settles With DOJ

Since August 1, 2008, Bank J. Safra Sarasin AG had 1,275 accounts that were owned by U.S.-connected taxpayers. These accounts had a collective aggregate maximum value of around $2.2 billion total.  The bank will be offering the IRS details on these accounts, as well as providing the names of accountholders along with information on transactions that took place with other financial institutions.

As part of its agreement with the Department of Justice, the bank also has to pay a penalty.  The penalty for Bank J. Safra Sarasin AG is $85.809 million.  The DOJ and IRS will also likely be pursuing investigations to try to recover penalties and back taxes from consumers with accounts at this offshore bank who had not declared their offshore investments.

The Department of Justice warned: “While U.S. accountholders at these banks who have not yet declared their accounts to the IRS may still be eligible to participate in the IRS Offshore Voluntary Disclosure Program (OVDP), the price of such disclosure has increased.”  

When an accountholder participates in OVDP, he has to pay a penalty in exchange for avoiding the chance of criminal prosecution and more serious consequences. As of August 4, 2014, accountholders will have to pay a penalty equal to 50 percent of the high value of undeclared offshore accounts if they make voluntary disclosures after their financial institution is identified as being under investigation, cooperating with an investigation, or settling with the DOJ.

Participation in OVDP may still be a better solution than having the IRS find out about your accounts on its own, but you should speak with a criminal tax lawyer in New Jersey like Kevin Thorn to find out what your options are and what course of action is right for you.  


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