It is nice to see that the IRS is going after the criminals rather than wasting its funds on law abiding, honest Americans. There are, no doubt, too many of the former group who are still illegally not paying taxes on their income and are still trying to hide their stolen money in Swiss bank accounts. Woe to he that tries to hide these illicit funds in Switzerland, or any other place in the world, for that matter. In a trilogy of articles published on the Reuters web site on January 27th, January 31st, and just yesterday, February 2nd, they report the unraveling of this web of secrecy within the oldest private Swiss bank named Wegelin. For the first time, because of their clients fleeing the bank, they have split their bank up into two portions. One part, containing their American customers caught in the IRS trap, remains Wegelin. The other part, containing all their other criminal customers who would have jumped overboard, like rats leaving the sinking ship, has been sold. They are transferring most of their clients and employees centered on Switzerland to Notenstein Privatbank, which is being bought by Raiffeisen. Wegelin will remain in charge of U.S. customers, the two banks said.
The Justice Department of the United States has indicted Wegelin, the oldest Swiss private bank, on charges that it enabled wealthy Americans to evade taxes on at least $1.2 billion hidden in offshore bank accounts. But what muscle does the Justice Department have? Unlike UBS, whose assets in the United States were attached by court action in the America, Wegelin has no branches in the USofA. But because Wegelin used “correspondent banks” to handle these funds originating in America, the U.S. government has seized more than $16 million from Wegelin’s correspondent bank, the Swiss giant UBS AG, in Stamford, Connecticut, via a separate civil forfeiture complaint.
The indictment clearly states the illegality and immorality of what Wegelin has been doing. The charges against Wegelin, of fraud and conspiracy, provide a rare glimpse into the rotten world of Swiss private banking:
* Wegelin, one of the last “pure” private banks, is principally owned by eight managing partners and run by an executive committee that included partners. One unindicted co-conspirator, named as Executive A at the bank, was a member of Wegelin’s executive committee and worked in Zurich.
* Wegelin used a special code, “BNQ,” on around 70 new U.S. undeclared accounts that were opened over 2008 and 2009. It also sometimes opened accounts for U.S. citizens who held passports from other countries, and opened the accounts through the non-U.S. passports.
* Wegelin recruited U.S. clients through a website, http://www.SwissPrivateBank.com, that was run by an unidentified third party. The website boasted there that “Swiss bank secrecy is not lifted for tax evasion … Neither the Swiss government nor any other government can obtain information about your bank account.” Unlike the United States, Switzerland generally does not consider tax evasion to be a crime.
* Wegelin gave accounts special names, including “Elvis” and “Limpopo Foundation.” The charges detailed the bank’s work for nearly three dozen American clients, known only as clients A through JJ.
* Wegelin encouraged clients not to come forward to the U.S. Internal Revenue Service and disclose their names in exchange for reduced penalties. Clients who did so in recent years helped provide the Justice Department with a roadmap to the inner workings of Wegelin – a map that led to the bank’s indictment.
We wish the IRS and the Justice Department success with this indictment and all their efforts to continue to focus their funds and efforts in catching these thieves, most of whom, incidentally are NOT Expats but Americans living on American soil stealing from other Americans. But we urge the IRS to not use this as a reason to continue to pursue law abiding Expats who are desperately trying to fulfill their obligations of American citizenship and pay their taxes. The message here is that the IRS should ease off on their distorted Offshore Voluntary Disclosure Initiative and Congress should repeal the Fatca (Foreign Account Tax Compliance Act).
IRS vs expats 