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More Swiss banks sign Non-Prosecution Agreements with the Department Of Justice (DOJ)

Posted by: Zaher Fallahi
Posted On: Jun 06, 2015

The Swiss Rothschild Bank AG (Rothschild)  and Banca Credinvest SA (Credinvest) are the latest banks that have signed  non-prosecution agreements with the DOJ, the Justice Department announced on June 3, 2015. Under the agreements, Rothschild will pay $11.51 million penalty and Credinvest will pay $3.02 million penalty.  In addition, the banks have agreed to cooperate in civil or criminal proceedings involving their U.S. customers, which resulted in mitigating their respective penalties.  The program protects from prosecution for cooperating category 2 banks in exchange for the payment of fines ranging from 20 to 50 percent of the maximum aggregate dollar value of the nondisclosed U.S. accounts.

According to the DOJ,  Rothschild and Credinvest had assisted their U.S. customers in hiding their foreign accounts using sophisticated scheme, enabling the account holders to avoid reporting and paying U.S. taxes, including numbered and/or coded accounts, “hold mail” services, and taking clients fleeing other banks under investigation by the DOJ. The announcement notes that Credinvest, that started fully licensed operations in 2005, “did not set up any formalized internal reporting regarding U.S. clients and did not adopt any procedures to ascertain or monitor the compliance of its U.S. clients with their U.S. tax obligations.”

Caroline Ciraolo, acting assistant attorney general in the DOJ Tax Division, said, ” as each additional bank signs up under the Swiss Bank Program, more and more information is flowing to the IRS agents and Justice Department prosecutors going after illegally concealed offshore accounts and the financial professionals who help U.S. taxpayers hide assets abroad.”   Following this announcement, any U.S. taxpayers with an undeclared account at either bank will face the higher, 50 percent penalty to enter the IRS offshore voluntary disclosure program (OVDP), bringing the number of these banks to seventeen.  For general information on the OVDP, FBAR and FATCA, and complete list of all seventeen banks (account holders of the banks)subject to 50% penalty, click:  https://sites.google.com/a/zflegal.com/zflegal/services/offshore-voluntary-disclosure-program-ovdp?pli=1  

Zaher Fallahi, Tax attorney, CPA, practices as a tax defense attorney in resolving tax controversy, unreported foreign bank accounts (OVDP, FBAR and FATCA), foreign trusts, IRS representation, international tax matters, tax preparation, and tax planning. Telephones:  Los Angeles (310) 719-1040 and Orange County (714) 546-4272, and e-mail:  taxattorney@zfcpa.com