Just curious because I was thinking about it today. Why doesn't DOJ just get a John Doe grand jury subpoena and cut to the quick?
Update 4/8/11: The order allowing the John Doe Summons was granted (see here). (Editorial comment: I hope none of my readers are surprised.)
Update 7/16/11: In response to some inquiries about what HSBC India will turn over, I provide the following. I don't know what HSBC India might turn over, but I will provide here the scope of the requests made in the John Doe Summons discussed above. In other words, if the DOJ / IRS gets everything requested in the summons and no more, this should indicate the scope of HSBC India's turnover. However, in UBS, my understanding is that, as a result of subsequent negotiations, DOJ / IRS got less than the full scope requested in the summons. On the other hand, my suspicion is that the HSBC India deal was wired before the John Doe Summons was issued so the scope of the John Doe Summons may indicate the scope of what will be turned over. Nevertheless, I can provide here only the scope of the summons and readers can then infer whether the scope is the same or more or less than HSBC India will actually turn over. Here is the indicated scope of the summons:
In the affidavit supporting the summons, the scope of the summons is described as: "
20. As will be described in greater detail below, the "John Doe" class is limited to United States taxpayers who, at any time during the years ended December 31, 2002 through December 31, 2010, directly or indirectly had an interest in or signature or other authority over any financial account maintained at, monitored by, or managed through HSBC India.From the Memo in support of the petition:
In addition to offering "standard" banking services at HSBC India through its NRI program, HSBC offers an enhanced personalized banking service for high net worth individuals called HSBC Premier. For clients who maintain a minimum balance of $100,000 in all HSBC accounts combined, Premier banking provides around-the-clock international services with worldwide access to account information regardless of where, and with which affiliate, the accounts physically reside. HSBC describes Premier as "relationship banking without boundaries," that "enables customers to access all their local and international accounts from a single on-line view and provides free international funds transfers between these accounts." HSBC provides online access to Premier accounts and services "through a globally integrated account [emphasis added] that can be accessed from anywhere a customer chooses to live or work." HSBC Premier allows customers living anywhere in the world to manage their accounts from anywhere in the world through online integrated banking. HSBC Premier customers and bankers can transfer funds seamlessly between accounts and between countries with the click of a mouse.
Whether they maintain a Premier account, or a "standard" account, United States taxpayers with NRI accounts at HSBC India can conduct all their transactions concerning their India accounts without ever leaving the United States. Armed with the knowledge -- provided by HSBC India bankers -- that the bank will not disclose their foreign accounts or income to the IRS, NRI clients of HSBC India in the United States have been able to maintain these foreign accounts with reasonable confidence that the IRS would not discover them.
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HSBC has advised the IRS that as of September 2010, approximately 9,000 United States residents who were "Premier" clients of HSBC, also had NRI deposits at HSBC India. As of December 2009, according to HSBC USA, U.S. resident Premier clients had NRI deposits of nearly $400 million. And yet, for calendar year 2009, the most recent year for which information is available, there have been only 1,391 FBARs filed disclosing 1,921 accounts at HSBC India. Accordingly thousands of United States taxpayers who maintain more than $100,000 in accounts with HSBC, may have failed to disclose their HSBC India accounts to the United States government. It is also likely that those taxpayers may have failed to report income earned on those undisclosed accounts.
The IRS seeks information about all accounts, both Premier and "standard." Hence, the proposed "John Doe" class is described as follows:
United States taxpayers, who at any time during the years ended December 31, 2002 through December 31, 2010, directly or indirectly had interests in or signature or other authority (including authority to withdraw funds; trade or give instructions or receive account statements, confirmations, or other information, advice or solicitations) with respect to any financial accounts maintained at, monitored by, or managed through The Hongkong and Shanghai Banking Corporation Limited in India (HSBC India).
DOJ Memorandum in Support of Motion for John Doe Summons
Reeves Declaration in Support of Motion for John Doe Summons
Order Allowing John Doe Summons
Lynnley Browning, U.S. Seeks HSBC Customers’ Names as Part of Tax Inquiry (NYT 4/7/11)
William P. Barret, IRS Targest 9,000 Taxpayers with Offshore Accounts Linked to India (Forbes Blog 4/7/11)