Offshore

US Close To Launching Fresh Tax Evasion Case Against A Foreign Bank

Tom Burroughes Editor London 16 March 2010

US Close To Launching Fresh Tax Evasion Case Against A Foreign Bank

US tax authorities are expected "very shortly" to launch another prosecution against a foreign bank similar to the tax evasion case they pressed against UBS, the Internal Revenue Service says, according to Reuters.

The name or regional location of this bank was not disclosed in the report.

UBS has already ceased providing offshore banking in the US, and other Swiss banks, such as Julius Baer and Wegelin, have also taken similar steps.

The IRS tax authority was not available for comment at the time this publication went to press.

Linda Osuna, IRS special agent in charge of the Tampa Field Office, was quoted by the news agency as saying that the expected US case against the foreign bank, which she declined to name, would be for "the same behavior that got UBS in trouble."

"Look very shortly, you're going to see it... I would say within the month," she said after addressing a money laundering conference in Florida.

To date, reports have been dominated by the UBS case, in which the Swiss bank paid a $780 million fine in February last year to settle criminal charges of aiding tax evaders; it has also moved to transfer up to 4,450 client account details to the US authorities as part of a civil case. However, a Swiss court has potentially derailed the data transfer, ruling that it breaches Swiss bank secrecy law.

Governments in the West are mounting an increasingly determined campaign against alleged tax evaders, a move that has gathered momentum due to the financial crisis as this has left governments with large budget shortfalls. Defenders of offshore banking and international financial centres claim they have been used as scapegoats and fear governments are engaging in economic and financial protectionism.

As reported last month, a US client of London-based HSBC admitted conspiracy over assets secreted abroad to evade taxes. The bank has also apologised after last week it said that data on as many as 24,000 client accounts had been stolen, of which 15,000 were still in use at the time of the theft. The UK government has reportedly paid for some of this data, which has also been offered to the French government, although the latter has handed a stolen CD back to the Swiss authorities.

Reuters reported that Osuna said further tax evasion cases were likely to result from information brought to light by a voluntary disclosure program, which originally led to 14,700 individuals coming forward before an 15 October deadline to disclose previously undisclosed foreign accounts.

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