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UBS Under Investigation Again

Offshore Account Update, UBS / HSBC

Posted on April 24, 2015 |

UBS Bank has been hit hard by federal investigators in recent years. In 2009, the offshore bank settled claims of helping clients to evade IRS tax obligations, paying a penalty of $780 million.  The bank is now being investigated again, this time for allegedly marketing illegal investments to U.S. investors who wanted to hide the income they were earning from the Internal Revenue Service. 

When banks and bankers are charged with facilitating tax evasion by the Department of Justice, these banks often end up turning over information on their clients in order to get a more favorable deal from authorities.  Investors need to be worried about the fact that banks are becoming more and more likely to share client data with the federal investigators, not just about offshore accounts, but also about potentially illegal securities buys. 

If you suspect your bank may provide information about your accounts that may not be above board, you do not want to wait to act.  Contact a New Jersey tax attorney right away to find out what options you may have for avoiding a criminal prosecution and limiting or avoiding financial penalties for tax evasion.

Did UBS Illegally Market Bearer Bonds to U.S. Customers?

The new question being asked by the Internal Revenue Service and the Department of Justice is whether UBS AG illegally marketed bearer securities to investors in the United States.

Bearer securities are investments that the issuing corporation does not keep a record of, unlike registered securities that are on the books. There is no evidence of a bearer security, except for the actual physical security itself.  This makes it easy to hide the investment from the IRS since there are no forms and there is no paperwork. 

Because bearer securities facilitate tax evasion and cannot be tracked or traced, these investments are not allowed to be sold to U.S. investors. Bearer securities in the United States have been banned for many years. Now, however, the IRS and the DOJ believe that UBS AG may have been marketing and selling these prohibited securities to investors in order to help them shield investment profits from being taxed.

It remains to be seen whether the investigation will prove fruitful and, if so, whether UBS will respond by providing information that the bank may have about the investors who purchased these types of investment products.

Both banks and bankers have demonstrated a willingness to provide evidence to the feds in exchange for reducing their own penalties.  One UBS Banker, for example, turned over information on other financial advisors and investment professionals in order to receive a sentence of five years probation for his part in tax evasion schemes.

If you purchased bearer securities in the past, or if you have any investments that the IRS does not know about, there is a good chance your own bank is going to provide information to the U.S. government some day about your dealings. Don’t wait for this day to come - be proactive and contact tax attorney Kevin Thorn today to explore your legal options.

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