Frank A. Rubino, ESQ.

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Offshore Account Case In Florida Results In Guilty Plea

We have discussed in the past how the IRS has begun to develop new methods to detect offshore bank accounts used by taxpayers. A recent federal case brought in Miami demonstrates a couple of potential new tactics the U.S. government may be using to pursue offshore accounts-related tax evasion.

The case involves a Swiss banker. The man had worked for a large Swiss bank for several years. The man then began to serve clients as an independent advisor. Federal authorities claimed that as an advisor, the man counseled one of his clients to use a Swiss regional bank to conceal money from the IRS. Reportedly, he also directed several of his clients to move hidden accounts to a regional Swiss bank.

The man was charged by the U.S. government for conspiring to commit tax fraud. He pled guilty to these charges. He is also now cooperating with U.S. authorities.

This case indicates two potential new tactics of U.S. in pursuing offshore accounts. The first involves the type of Swiss bank accounts the government is pursuing. In the past, the government has focused litigation on the large Swiss banks that do business internationally. However, this case involved conduct connected to smaller regional Swiss banks. This could indicate that the U.S. is beginning to go after these smaller banks in tax fraud cases.

The second tactic involves bringing cases against individual bankers. In this case, this strategy appears to have yielded strong results for the government. It has resulted in a criminal prosecution, a guilty plea, and cooperation from the prosecuted individual which could assist the government in their efforts to investigate and detect offshore accounts. This success could lead to the government targeting these individual advisors more often in tax evasion cases.

Source: The Wall Street Journal, "Swiss Banker Pleads Guilty in U.S. Tax Case," Brent Kendall, 23 Dec 2010

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