The latest chapter of the IRS versus the Swiss Banks, reveals U.S. Prosecutors taking on the oldest Swiss bank of them all: Wegelin & Co.,
An article in the Wall Street Journal entitled Swiss Bank Wegelin Indicted on U.S. Tax Charges, outlines the criminal charges filed by U.S. Prosecutors on February 2, 2012 against Wegelin & Co., Switzerland’s oldest bank (founded in 1741) alleging that Wegelin knowingly aided wealthy Americans in hiding more than $1.2 billion in unreported offshore accounts. A UBS account belonging to Wegelin and containing $16 million USD was also seized by U.S. authorities.
Prosecutors are claiming that Wegelin actively sought the “illegal U.S. cross-border banking business” that UBS and another bank lost after a 2008 and 2009 U.S. investigation. The heat was turned up on Wegelin, however in January 2012 when criminal charges were brought against three Wegelin bankers for helping U.S. taxpayers hide their money from the U.S. authorities in Swiss accounts between 2002 and 2011.
The U.S. is encouraging the Swiss government to engage in a comprehensive settlement with U.S. authorities involving all Swiss banks. The reason: U.S. authorities are determined to get the names of U.S. taxpayers with secret Swiss accounts; Swiss secret banking laws prohibit this action.
The Wegelin Indictment should serve as a warning as it demonstrates the fierce determination on the part of the U.S. government to prosecute not only individuals, but also banks suspected in aiding abetting U.S. tax evaders wherever they are on the planet.
Here are some the details in the U.S. case against Wegelin & Co.:
How Wegelin Encouraged U.S. Tax Evasion
According to the indictment, Wegelin & Co. had a banking relationship with nearly three dozen U.S. as it was described in full detail. These describe vividly amounts of the undeclared funds and the great lengths both bankers and clients went to hide their transactions.
U.S. clients were allegedly persuaded into transferring funds from UBS into Wegelin, suggesting that because they had no offices outside Switzerland, they would not be subject to outside detection from U.S. tax authorities. Prosecutors also allege banks told U.S. clients their undeclared accounts could not be revealed to U.S. authorities due to Swiss banking’s secrecy laws and discreet practices.
The indictment alleges that Wegelin saw the opportunity to charge “high fees” to new U.S. clients because they were afraid of U.S. criminal prosecution.
Prosecutors also allege that Wegelin & Co opened accounts using phony offshore foundations and corporations in such locations as Liechtenstein, Panama and Hong Kong in order to avoid detection. Some clients opened accounts using code names or numbers so as to not be detected by name.
Wegelin & Co. allegedly sought new U.S. clients between 2005 and 2009, via the SwissPrivateBank.com website that was operated by a third party.
In order to avoid detection, the banks sometimes communicated to U.S. taxpayers by using their personal email accounts and did not mail account statements and other documents to avoid detection.
More Tax Help, IRS News and Tax Relief Tips:
- Swiss Bank Wegelin Avoids Court Appearance
- Swiss Pressured to Reveal All Offshore Accounts
- Treasury Proposes Multilateral Agreement for Offshore Compliance
- Offshore Tax Evaders Get Preferred IRS Help
- IRS Help for Americans with Foreign Income
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