UBS Admits to helping tax evaders

[General Zod]

So much for that loophole.

Swiss banking giant agrees to pay $780 million and hand over account information after helping U.S. clients evade the IRS.

WASHINGTON (CNN) -- Switzerland's largest bank, UBS, has admitted helping U.S. taxpayers hide money from the IRS, and has agreed to pay $780 million in fines and restitution, and to turn over account information.

The deferred prosecution agreement was approved Wednesday by a federal court judge in Fort Lauderdale, Fla.

"UBS admitted to conspiring to defraud the United States by impeding the IRS," the Justice Department announced late Wednesday.

The statement says that UBS, "in an unprecedented move" based on an order by Swiss authorities, has agreed "to immediately provide the U.S. government with the identities of, and account information for, certain U.S. customers of UBS's cross-border business."

UBS (UBS) also has agreed to end its business practice of providing banking services to U.S. customers with undeclared accounts.

"Swiss bankers routinely traveled to the United States to market Swiss bank secrecy to United States clients interested in attempting to evade U.S. income taxes," the Justice Department said.

The government document says Swiss bankers made a total of about 3,800 trips to discuss their clients' accounts.

The government said that because the bank has acknowledged responsibility for its actions, has cooperated fully, and has taken remedial actions, the United States will recommend dismissal of the criminal charge "provided the bank fully carries out its obligations under the agreement."

Two former UBS bankers have pleaded guilty to charges of conspiracy for similar conduct.

The acting head of the Justice Department Tax Division called Wednesday's agreement "but one milestone" in the effort to make sure U.S. citizens pay their fair share of taxes.

"The veil of secrecy has been pulled aside, and we will continue to aggressively pursue those who shirk their federal tax obligations, or assist others in doing so," said John DiCicco, acting assistant attorney general for the Justice Department Tax Division.

IRS Commissioner Doug Shulman issued a warning to the taxpayers who held the accounts, telling them to voluntarily pay up.

Shulman said the taxpayers should note that Wednesday's agreement also stipulates that the U.S. government will continue to seek enforcement of its court action.

"People who have hidden unreported income off shore need to get right with their government. They should come forward and take advantage of our voluntary disclosure process," Shulman said. To top of page

I'm kind of surprised given Switzerland's rather infamous iron-fistedness with its banks. 3,800 trips though. . .somehow I expected the number would be higher.

[Sea Skimmer]

Switzerland has long since ceased to be a super private money hole. They still are very secret but they’ve given up a number of the key protections they used to give customers, like purely numbered accounts. Lichtenstein had an even stricter set of standards, and still mostly follows them, but signs are that’s going to change very soon too because they’ve come under tremendous pressure and threat of being officially labeled as a tax haven. The Caymen islands remains popular though, they’ve got nothing else for an economy so they’ll never stop doing it.

[Jalinth]

Switzerland has long since ceased to be a super private money hole. They still are very secret but they’ve given up a number of the key protections they used to give customers, like purely numbered accounts. Lichtenstein had an even stricter set of standards, and still mostly follows them, but signs are that’s going to change very soon too because they’ve come under tremendous pressure and threat of being officially labeled as a tax haven. The Caymen islands remains popular though, they’ve got nothing else for an economy so they’ll never stop doing it.

Be interesting to see if governments start using the German approach to investigation - use their spy service to simply steal the information via a well placed bribe or two.

[fgalkin]

Cyprus is also a good place for that sort of thing. The Channel Islands are useful as a tax haven, but they're rather too close to the UK for actual dirty money. Lebanon's banking system is supririsingly stable, and they're not looking too closely at where your money comes fro, so it is growing as another haven.

Working with people who actually use all those places is fun.

Have a very nice day.
-fgalkin