Tag Archives: Department of Justice Tax Division

And The Walls Came Tumbling Down – Switzerland Helping IRS Find Tax Evaders

30 Aug

swiss flagNo more small potatoes million dollars here and million dollars there indictments. The big times will roll. The biggest net is now being thrown and the biggest fish are about to be caught. This is a big step in tightening the noose around the tax evaders. And I do not hesitate to predict, based on who these criminals have been in the past, that they WILL NOT BE EXPATS LIVING AND WORKING ABROAD. They will be prominent, seemingly law abiding citizens living in the United States, who secretly stash their illegally untaxed dollars in accounts outside the United States

Switzerland and the United States reached a watershed deal on August 29, 2013 to punish Swiss banks that helped wealthy Americans stash money in hidden offshore accounts, closing the door on an era of bank secrecy and tax evasion.

The formal agreement, which was announced on Thursday by the Justice Department in Washington and will be presented by Swiss authorities on Friday, outlined formulas for Swiss banks to pay up to billions of dollars in fines and disclose information about American account holders, a joint statement said.

The deal calls for stiff measures that lift the veil of Swiss secrecy. Banks will be required to provide the details on accounts in which American taxpayers have an interest through treaty channels, inform on other banks that transferred money into secret accounts or that accepted money when secret accounts were closed, disclose all cross-border activities, and close the accounts of Americans who are evading taxes.

Significantly, the deal does not cover 14 Swiss banks and Swiss branches of international banks that are under criminal investigation by the United States authorities, including Credit Suisse, Julius Baer and several regional banks. Instead, it effectively covers the rest of the Swiss banking industry, home to a tradition of bank confidentiality and laws that have not considered tax evasion a crime. By some estimates, Switzerland is home to more than $2 trillion in overseas deposits.

“This program will significantly enhance the Justice Department’s ongoing efforts to aggressively pursue those who attempt to evade the law by hiding their assets outside of the United States,” Eric H. Holder Jr., the attorney general, said in a statement.

He added that the program, outlined over 11 pages, “is intended to enable every Swiss bank that is not already under criminal investigation to find a path to resolution.”

The agreement said that Swiss banks that follow the program will be eligible to enter non-prosecution agreements that do not involve guilty pleas or criminal penalties.

Mr. Holder’s statement suggested that some unidentified Swiss banks were not cooperating and thus could face indictment. The agreement, he said, “creates significant risks for individuals and banks that continue to fail to cooperate, including for those Swiss banks that facilitated U.S. tax evasion but fail to cooperate now, for all U.S. taxpayers who think that they can continue to hide income and assets in offshore banks, and for those advisers and others who facilitated these crimes.”

The agreement will also turn up the heat on American clients who have not already entered voluntary disclosure programs with the Internal Revenue Service.

Banks that enabled tax evasion after the United States authorities began their investigation will face more severe punishment. Banks that held accounts as of Aug. 1, 2008, will pay a fine equal to 20 percent of the top dollar value of all non-disclosed accounts. The fine increases to 30 percent for secret accounts opened after that date but before March 2009, and to 50 percent for accounts opened after that.

American officials were angered that some Swiss banks accepted clients who were fleeing UBS, the largest Swiss bank, about 2009, when it averted indictment by reaching a $780 million deferred prosecution agreement with United States officials.

The Justice Department has not put a final tally on the amount that Swiss banks will pay in fines under the deal, an American government official said, in part because it does not yet know the number. Both sides signed the final deal after the Swiss Federal Council on Wednesday instructed the country’s finance officials to put the finishing touches on the agreement.

Switzerland has been locked in thorny negotiations with Washington over the tax evasion issue since 2009. Scores of Swiss bankers, lawyers and American taxpayers have been indicted in recent years, including Wegelin & Company, the oldest Swiss bank, which went out of business. Negotiations took a turn for the worse in recent years amid conflicts between Justice Department officials and Michael Ambuehl, the former top Swiss negotiator who stepped down in May.

A previous attempt by the Swiss government to arrange a deal failed in June when Parliament balked, reflecting concerns about privacy and complaints that the agreement was being negotiated in secret. Legislators then called on Eveline Widmer-Schlumpf, the Swiss finance minister and president of the Federal Council, to work out an agreement with Washington.

A stumbling block may still exist. The deal calls for both sides to use information exchange channels outlined in existing treaties. But the United States has not yet ratified a 2009 treaty protocol that would ease that disclosure, with Senator Rand Paul, Republican of Kentucky, blocking approval, arguing that it would give the I.R.S. too much power and violate Americans’ right to privacy.

Latest of 30 Guilty of Not Reporting to the IRS = What happened to one man who didn’t report his FBAR

8 Sep

This post is from the United States Department of Justice website.

I emphasize that this individual, Michael Reiss, WAS AND IS NOT AN EXPAT. The next post will deal with how these thieves are causing the IRS to be on high alert and hunting for huge amounts of money that are legally and morally due to the United States. These American thieves who live IN America are causing we expats, who try to comply with the law, to suffer as a result of intense scrutiny by the IRS.

United States Attorney Southern District of New York
AUGUST 5, 2011
(212) 637-2600
(212) 436-1032


PREET BHARARA, the United States Attorney for the Southern District of New York, and CHARLES R. PINE, the Special Agent-in-Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation Division (“IRS-CID”),announced that MICHAEL REISS, a Princeton, New Jersey, doctor,professor, and medical researcher, pled guilty today to willfully failing to file Reports of Foreign Bank and Financial Accounts(“FBARs”) with the IRS, regarding Swiss bank accounts that he maintained and controlled. REISS utilized the services of BEDA SINGENBERGER, a Swiss financial adviser who was charged in an indictment returned in the Southern District of New York on July21, 2011. As part of his agreement resolving the criminal charges, REISS agreed to pay back taxes of at least $400,000, and to pay a civil penalty of over $1.2 million. REISS entered his guilty plea before U.S. Magistrate Judge HENRY B. PITMAN.
Manhattan U.S. Attorney PREET BHARARA said: “As our prosecutions of tax cheats like Michael Reiss should make abundantly clear, failing to report assets overseas to circumvent the law and avoid paying taxes is a crime and, along with our partners at the IRS, we will aggressively enforce the law in this area. The people who engage in this conduct are among the more privileged in our society, but they are not above the law.”
IRS Special Agent-in-Charge CHARLES R. PINE said:”Offshore tax enforcement has become a major priority for every
part of the IRS, including IRS-Criminal Investigation. Tax secrecy continues to erode and we are not letting up on international tax issues. It’s a matter of restoring publicconfidence in our tax system and assuring all Americans are held to the same standard of paying their fair share.”

According to the Information filed today in Manhattanfederal court, the previously filed Singenberger Indictment, and statements made in connection with REISS’s guilty plea:
From 2000 until 2010, REISS was required to file an FBAR annually with the IRS for various accounts he held at Swiss banks. He was required to identify the financial institutionwith which his account was held, the type of account, the account number, and the maximum value of the account during the calendar year for which the FBAR was being filed. He failed to do so.
Specifically, starting 2000, REISS held an account at UBS AG in Switzerland (“UBS”). In 2002, REISS transferred the assets held in that account to another Swiss bank. Later, inSeptember 2003, REISS, with the assistance of SINGENBERGER,opened an undeclared account at yet another Swiss bank (“SwissBank No. 1”) in the name of a sham foundation, the FloranovaFoundation. The foundation, of which REISS was the sole beneficiary, had previously been formed by SINGENBERGER under thelaws of Liechtenstein. By opening the account at Swiss Bank No.1 in the name of the Floranova Foundation, REISS was attemptingto obscure his ownership of the assets in the account from the IRS. As of March 31, 2008, REISS’s account at Swiss Bank No. 1 in the name of the Floranova Foundation account held assets valued at approximately $2.588 million.
In November 2008, REISS, again with SINGENBERGER’s assistance, opened another undeclared account at Swiss Bank No.
1. The account was opened in the name of Upside International Ltd., a corporation previously formed by SINGENBERGER under the laws of Hong Kong. The assets of REISS’s account at Swiss Bank No. 1 in the name of the Floranova Foundation were then transferred shortly thereafter into REISS’s Upside InternationalLtd. account.
For each of the calendar years from 2000 through 2007,REISS filed and caused to be filed with the IRS an FBAR. On each of these FBARs, REISS indicated that he had an interest in one or more bank or securities accounts at ABN AMRO Bank in the Netherlands, but he failed to disclose financial accounts at UBS and Swiss Bank No. 1, as well as an account at the Swiss branch of another bank that REISS held. For the calendar years 2008 and 2009, REISS did not file an FBAR with the IRS disclosing hissignatory or other authority over his account at Swiss Bank No.
1. REISS’s tax returns for the years 2000 through 2009 were
similarly false in omitting the information about his Swiss bankaccounts.
REISS’s guilty plea is the seventh in the Southern District of New York by a U.S. taxpayer who held an undeclaredaccount in Switzerland at UBS and/or other Swiss banks, and who  failed to make a timely voluntary disclosure to the IRS as partof the IRS’s Voluntary Disclosure Program.
* * *
REISS, 60, faces a maximum term of five years in prison, a maximum term of three years of supervised release, and fines of the greatest of $250,000, or twice the gross pecuniary gain derived from the offense or twice the gross pecuniary lossto any victim.
SINGENBERGER is alleged to have helped U.S. tax payers hide more than $184 million at various Swiss banks. The case against him is pending. The charge and allegations contained in the Indictment of SINGENBERGER are merely accusations, and he ispresumed innocent unless and until proven guilty.
Mr. BHARARA praised the outstanding efforts of IRS-CID in the investigation, which he noted is ongoing. Mr. BHARARA also thanked U.S. Department of Justice’s Tax Division for their assistance in the investigation.
This case is being handled by the Office’s ComplexFrauds Unit. Assistant U.S. Attorneys DANIEL W. LEVY, DAVID B.MASSEY, and JASON H. COWLEY are in charge of the prosecution.
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