If you had money offshore and didn't file annual Reports of Foreign Bank and Financial Accounts (FBARs), you could find yourself facing penalties imposed by the Internal Revenue Service (IRS). Banks are cooperating with the IRS and giving detailed account information about people with offshore funds.  If the IRS determines you failed to follow the rules for reporting offshore accounts and paying taxes on income, there's the potential for criminal consequences.

Switzerland has long been the location where U.S. investors keep funds offshore because of strong banking privacy laws. With the Swiss Bank Program and the Department of Justice crackdown on Swiss institutions, however, this is no longer the case.

Edmond de Rothschild (Suisse) SA and Edmond de Rothschild (Lugano) are two financial institutions that are part of Edmond de Rothschild Switzerland (EdR).  These two institutions made a deal with the Department of Justice in December so EdR can avoid criminal prosecution. The institutions were at risk of being charged with helping to facilitate tax evasion, as the banks reportedly aided U.S. accountholders in hiding funds offshore over the course of more than a decade.  EdR Switzerland had 950 U.S. affiliated accounts at one point, with as much as $2.16 billion in assets in these accounts at one time. 

Luzerner Kantonalbank AG (Luzerner), Habib Bank AG Zurich (HBZ), Banque Heritage S.A. and Hyposwiss Private Bank Genève S.A. (Hyposwiss Geneva) are four foreign financial institutions that are among the latest banks to give U.S. taxing authorities information about customers with offshore accounts.  These banks are now added to the long list of financial institutions that have been willing to turn over details about their customers in order to avoid facing criminal prosecution.

The Swiss Bank Program lets banks pay penalties and enter into non-prosecution agreements to avoid criminal charges for helping to facilitate tax evasion.  The banks can't just pay the penalty to participate -- they also have to provide information to the Department of Justice about account holders and their tax evasion activities.