Swiss Bankers Get Probation…After Cooperating with US Prosecutors
In a recent case (11/2018), a Manhattan Federal Court Judge sentenced two Swiss Bankers that defrauded the IRS with probation.
While that’s great for them…how many names did they have to give up to the IRS?
- 1 Your Swiss Accounts are Neither Confidential Nor Secret
- 2 What Happened in This Case?
- 3 “Cooperating with Prosecutors” – What Does that Mean?
- 4 Not Everyone Gets in Trouble
- 5 What if I am Out of IRS Compliance?
- 6 We Specialize in Safely Disclosing Foreign Money
- 7 Be Careful of the IRS
- 8 Golding & Golding, A PLC
Your Swiss Accounts are Neither Confidential Nor Secret
Sure, maybe 30-years ago when you opened a Swiss Account and used a “number account” or “falsified entity” to hold the account, they were shielded from discovery by the IRS.
Fast-forward to 2018, with the IRS entering into numerous non-prosecution agreements with foreign banks (in exchange for U.S. Account Holder information) throughout Switzerland – coupled with the renewed interest in FBAR enforcement and the development of FATCA – chances are your information will end up in the hands of the IRS.
That is not to say that everyone gets investigated or prosecuted (they don’t), but it puts you at an unnecessary risk you would have never had to deal with in the first place, had you not opened Offshore/Foreign “confidential” or “secret” accounts.
What Happened in This Case?
Here, the two defendants were employees for Zurcher Kantonalbank (“ZBK”) — a foreign financial institution that entered into a “Deferred Prosecution Agreement” with the U.S. — and participated in a scam designed to shield accounts and income from the prying eyes of the IRS.
Although the defendants were not the ring leaders, they were involved in the scam and helped facilitate the defrauding of the U.S. Government (as well as not paying their own taxes).
But, in granting a lenient sentence, the judge relied on the fact that the bankers had cooperated with prosecutors. As provided in an article by Jack Newsham for Law 360,
“Stephan Fellmann and Christof Reist were each sentenced to a year of probation without the usual terms, allowing them to return to their home country after having spent several months in the U.S. cooperating with prosecutors.”
“Cooperating with Prosecutors” – What Does that Mean?
Well, it can mean a lot of things, but it usually does not mean they kept your information secret and confidential…
It is unclear just how much information they were privy to, and how many names they turned over to the U.S. Government.
Unfortunately, this may set the clock running faster than it did before for the IRS to discover your offshore accounts. And, if the IRS contacts you first, before you have a chance to disclose, you can be disqualified from voluntary disclosure.
Not Everyone Gets in Trouble
As Attorneys who focus exclusively on IRS Disclosure, we have seen many, many cases. Some good people get caught in the IRS disclosure matrix, while other not so “clean” clients go their whole lives never being investigated by the IRS.
In the end, the decision to disclose is personal to each and every individual (trust, estate, or entity) and you should not let any attorney ever pressure you into disclosure.
You just have to realize the pros and cons, weight benefits, and make an informed decision based on your own, personal risk tolerance level.
What if I am Out of IRS Compliance?
When you have not met your prior year IRS foreign bank account compliance obligations, your best options are either the traditional IRS Voluntary Disclosure Program, or one of the Streamlined Offshore Disclosure Programs.
We Specialize in Safely Disclosing Foreign Money
We have successfully handled a diverse range of IRS Voluntary Disclosure and International Tax Investigation/Examination cases involving FBAR, FATCA, and high-stakes matters for clients around the globe (In over 65 countries!)
Whether it is a simple or complex case, safely getting clients into compliance is our passion, and we take it very seriously.
Be Careful of the IRS
With the introduction and enforcement of FATCA for both Civil and Criminal Penalties, renewed interest in the IRS issuing FBAR Penalties, crackdown on Cryptocurrency (and IRS joining J5), the termination of OVDP, and recent foreign bank settlements with the IRS…there are not many places left to hide.
Golding & Golding, A PLC
We have successfully represented clients in more than 1000 streamlined and voluntary disclosure submissions nationwide, and in over 70-different countries.
We are the “go-to” firm for other Attorneys, CPAs, Enrolled Agents, Accountants, and Financial Professionals across the globe.