Part I - US tax cheats pay for secret Swiss accounts, Aug. 3, 2010 (Swiss.info.CH)
The IRS has named and shamed 17 offenders on their website with sentences ranging from tough fines and prison time. The Swiss parliament recently ratified a deal to hand 4,450 UBS client names to the IRS. One watch manufacturer was put behind bars for ten months, a children’s toy dealer will spend six months under house arrest after serving three months in jail while a yacht broker received two months in prison and five months of home confinement. On top of jail sentences, the guilty must all pay up the taxes they dodged in the first place and in addition face heavy fines. The most severe financial penalty listed to date was $20.4 million (SFr21.3 million) issued to a watch dealer. Another group of seven tax dodgers are said to have hidden some $100 million in secret UBS accounts. In 2008 the US Department of Justice (DoJ) estimated that up to 20,000 US citizens had some $20 billion in assets hidden abroad. The details of such convictions reveal a highly sophisticated web of evasion, sometimes dating back to the 1970s, that could involve setting up fake companies in various countries or repatriating funds via bogus loans.
More banks targeted
The growing list of confessions, judgments and punishments follows the release of 285 UBS client names to the US tax authorities last year. Observers expect more convictions from that batch, with thousands of names yet to be revealed. “The IRS and the DoJ have moved quickly, as time is measured in the world of criminal tax cases, to bring as many as they have,” US tax lawyer Scott Michel told swissinfo.ch. “Criminal tax cases often take a long time, and there are clearly other cases under investigation that present more mitigating circumstances and perhaps greater complications than the ones brought so far. These will take more time.” The public naming and shaming of individuals is designed to flush more tax evaders out into the open with voluntary disclosures before they get caught and handed more severe penalties. But with the publicity surrounding the UBS case diminishing, Michel is among many observers who believe that the US authorities might soon start to move against the clients of other banks in offshore tax havens. “I suspect there will come a time when the deterrent effect obtained by yet another UBS prosecution will be quite minimal, compared with the splash the IRS and DOJ could achieve by moving after customers of other banks in non-Swiss jurisdictions. That time may in fact be fast approaching,” he said.
