Mark Daly of the Justice Department Tax Division Criminal Enforcement Section talked about DOJ's approach to using data so gathered. DOJ is especially interested in bankers who helped fleeing UBS customers move to other banks. "They're the most culpable," Daly said.
Swiss bankers are so nervous and so inconvenienced by their inability to travel that they have been offering bank account information to DOJ in an effort to obtain immunity. And there are a lot of CDs floating around Europe.
"We're finding a lot more people knocking at our door," said Daly. "Your banker knows who you are." Moreover, DOJ can reconstruct bank account data to find transactions like monthly wires structured to evade suspicious transaction reports.
But DOJ does not interpret the money laundering (18 U.S.C. section 1956) rules to grab income tax violations. According to the U.S. Attorneys' Manual, mailing a false tax return is not considered mail fraud, a predicate offense to money laundering. There has been no change in policy, according to Daly.Tax Division policy on money laundering charges in cases which are principally tax violations is set forth in DOJ Tax CTM (2008), Section 25, here.
The Tax Division will not authorize such charges where the effect would merely be to convert routine tax prosecutions into money laundering prosecutions, as the statute was not intended to provide a substitute for traditional Title 18 and Title 26 charges related to tax evasion, filing of false returns, or tax fraud conspiracy. Appropriate tax-related Title 18 and Title 26 charges should be utilized when the evidence so warrants. However, the Tax Division will approve money laundering charges when warranted by the circumstances. See Tax Division Directive Number 128.Tax Division Directive Number 128, titled "Charging Mail Fraud, Wire Fraud or Bank Fraud Alone or as Predicate Offenses in Cases Involving Tax Administration," is contained both in the CTM and in the USAM Title 6, Resource Manual, here. The required money laundering proceeds must be from conduct constituting "predicate offenses. Tax crimes per se are not predicate offenses, but tax crimes almost always involve conduct that could be characterized as mail fraud or wire fraud. Hence, it is important to understand when tax crimes are of sufficient kind to turn into the type of mail fraud or wire fraud that could be used as a predicate offense for a money laundering charge.
Finally, for those desiring to pursue the tax and money laundering connection, I provide my discussion from the current draft of my Federal Tax Crimes book, here.