Barbados

US offshore probe set to continue


By added on 03/05/2010

The U.S. government expects to probe thousands more cases of wealthy individuals dodging taxes through offshore bank accounts, on top of the high profile case against UBS AG, a U.S. tax attorney said on Monday.

"We expect over the next couple of years, in addition to the UBS cases, to have somewhere between 4,000 and 7,000 more cases coming to us with. These are from banks and governments cooperating," said Kevin Downing, a senior tax attorney of the U.S. Department of Justice, in a lecture in Singapore.

According to the Reuters article, some private banking clients are choosing to take cash from Swiss accounts and carry it by hand back to the United States, to avoid an electronic trail, only to be caught by U.S. law enforcement officers and penalised for tax evasion and illegal smuggling of money into the country, Downing said.

"When they go in and close their accounts, they are picking up brand new $100 bills ... that are coming in $100,000 shrink-wrapped bundles. Guess what? We can trace that money," he said, adding such cash would be forfeited.

Singapore was one stop in a tour of Asian cities also including Hong Kong, Beijing and Shanghai by Downing and his U.S. Justice Department team. The tour featured meetings with financial and tax regulatory bodies and bankers discussing cross-border tax prosecutions.

He said that since the start of the U.S. crackdown on tax evasion, money has moved from the Caribbean to Switzerland and Asia.

UBS agreed last year to pay $780 million and hand over 4,450 client names to settle charges after it admitted helping U.S. clients evade U.S. tax law.

Germany has said it is prepared to pay for data offered by whistleblowers on clients of Swiss banks who may have been evading taxes, while France said it had obtained sensitive data belonging to potential tax evaders, some of which belonged to the Swiss private banking operations of HSBC.

Downing declined to say whether the Justice Department was investigating any other foreign banks and said he hoped the U.S. authorities would not have to conduct "UBS-style" probes.

About 15,000 Americans with offshore accounts came clean under an amnesty program last year, giving them reduced penalties and a chance to avoid criminal prosecution while giving authorities a trove of information to assist their hunt.

"We now have the ability to go back through with voluntary disclosures and really target the banks with witnesses and evidence that's right in the United States," Downing said.

"These U.S. clients who maintain these offshore bank accounts, they keep their e-mails, they want to have a record. They are coming back to us."