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Crackdown on Foreign Banks and Bankers Makes Clients Vulnerable

Offshore Account Update

Posted in on November 28, 2014

The U.S. government is determined to stop tax evasion and they are doing so by going after banks and bankers. Unfortunately for the clients of those bankers, many are willing to turn over information on their clients as part of plea deals to avoid jail time or lessen their personal consequences.  Some banks have already paid huge fines and some bankers are already on trial.

What does this mean to you? If you have money in an offshore account that you have not reported, your banker could be the next to turn over client info. Once the government has been told about your accounts, you may lose access to voluntary disclosure programs that limit your penalties. That said, do not hesitate. Take action today to do everything possible to protect yourself from tax evasion accusations. Call a New Jersey tax attorney for help learning about your options if you are keeping money offshore.

Crackdown on Foreign Banks and Bankers

Starting in 2018, banks in Switzerland and many other countries worldwide have agreed to the voluntary and systematic exchange of client information. The purpose is for governments to find out what accounts you may have offshore. This, in turn, will allow the U.S. government to make sure you are paying taxes on those foreign accounts.

Although the systematic exchange of information is a new rule, banks and bankers have never been allowed to facilitate tax evasion. Many banks, however, have been doing just that. One whistleblower came forward in 2008 to alert the U.S. government about some of the behaviors of bankers working for UBS bank. The American employee of UBS told of encrypted laptops, smuggled diamonds and bankers getting tourist visas so they could come to the U.S. without raising suspicion.  In light of the revelations, UBS paid $780 million in fines to the U.S. government and turned over information on 4,000 bank clients.

UBS is not alone. More than 100 banks (mostly small and mid-size) have entered into deals with the U.S. government, paying fines in order to avoid being indicted. Some of the bigger banks under investigation have been blocked from making deals, according to Business Insider.

As if the crackdown on banks was not enough to scare investors, the U.S. government is also going after bankers personally. In October, for example, jury selection began for a trial in federal court. The head of UBS’s global private banking business was arrested in Italy and extradited to the U.S. to stand trial for allegedly helping clients hide approximately $20 billion in offshore investments. Other bankers who will be testifying against him are fearful they will be next, and accordingly, they are sending in video testimony from Switzerland because they are afraid to come to the U.S.

The crackdown is not limited to Switzerland, as the U.S. authorities have announced plans to go after banks in Singapore, Israel and the Caribbean.

If you have money offshore, there are a number of reasons to be concerned that your bank (or banker) is going to give the government your information to save themselves. You need to act quickly and take part in voluntary disclosure programs before it is too late. Contact a New Jersey tax attorney at Thorn Law Group for help today.


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