The Plot Thickens for Swiss Bankers Involved In U.S. Evasion (8/8/12; supplement 8/9/12)

A commenter alerted me to some developments regarding at-risk Swiss bankers and their travel plans.  I link to some of the articles below with some cuts and pastes:

US may target Swiss bankers travelling in Europe (Swissinfo.ch 8/6/12), here.

Swiss bankers whose names were delivered to the United States in April as part of the crackdown on US tax evaders face the risk of arrest while travelling in some European countries, not just on US soil. 

Extradition treaties between the US and countries including France, Germany, Italy, Austria and Britain make it possible for the US to take legal steps via Interpol against bankers suspected of helping US citizens evade taxes, Denise Chervet, central secretary of the Swiss Bank Employees Association told the Swiss News Agency. 

 “If the US issues an arrest warrant via Interpol, the employee targeted could be arrested in any country with which Washington has an extradition treaty, and where the alleged offences are also punishable,” Chervet said. 

 Around 10,000 employees of 11 banks under investigation by US authorities could be affected by potential travel restrictions. 

 Chervet said that employees visiting the US who had had direct contact with American clients “run the risk of being arrested for violating American tax laws for having assisted with tax evasion”. Other bank employees who may not have had direct contact with clients could be called as witnesses, she said. 

 Bankers’ families could also be implicated: a report in La Tribune de Genève newspaper this week said two teenagers who arrived in the US to visit their grandparents were interrogated by officials for six hours about the whereabouts and working habits of their father, a Geneva banker.

Swiss banker's children quizzed by US officials over tax (The Local 8/6/12), here.

US attempts to clean up on tax evasion took a new twist when a Geneva banker's two teenage children were detained when they arrived on US soil, it was reported Monday. 

The teenagers, due to visit their grandparents, were questioned for several hours by US officials who asked them the whereabouts of their father and whether he sometimes worked in the country, according to La Tribune de Genève newspaper. 

During their six-hour interrogation the youngsters were not allowed to contact their grandparents who were waiting for them at an undisclosed airport, the report added. 

 * * * * 

In all, some 10,000 names of people linked to Swiss banks with American clients were given to the US tax office with Bern's blessing, according to SwissRespect, the organisation founded by Geneva lawyer Douglas Hornung who represents bank employees caught up in the affair.

"I advise my clients not to leave Switzerland," said Hornung, who advises around 40 bank staff in the country. 

Petros has posted the following blog on the Isaac Brock Society:  Children of Swiss asset manager detained for six hours for questioning by US officials (Updated with partial translation) (Isaac Brock Society 8/6/12), here.  The blog has a partial translation of the French from the article:

The banks recommend that their current and former employees whose names were transmitted to the other side of the Atlantic avoid going to the US. But such a precaution seems to be quite insufficient, considering the number of extradition treaties that exist. “I encourage my clients not to leave Switzerland” said Douglas Hornung, Attorney at Law in Geneva, who represents approximately 40 employees of banks involved in this matter.The disagreements go much further than a limited choice of vacation destinations, or family visits that must be postponed. Few banks in Switzerland or elsewhere, perhaps none at all, are interested in employing a “listed” bank employee from one of the 5 banks who gave data to the Department of Justice in order to avoid criminal prosecution. Careers risk being derailed because of this. « Banks are not afraid to expose their employees to potentially devastating consequences » wrote another newspaper “Le Temps” last month. 

Doubts about legality 

This matter has caused accusations of treason in the Swiss financial world. Opinions of [legal] experts have only reinforced this. The Swiss Federal Commissioner on Data Privacy, Hanspeter Thür, has continually repeated his doubts about the legality of delivering employee data to the American administration. “The employer does not have the right to reveal the names of its employees. If it is compelled to do so, it must inform the employees, and cover any damages and legal fees, warns Thomas Geiser, Professor of Law at the University of Saint-Gallen. 

Huge Inconsistency 

The five banks implicated in the matter can certainly defend themselves. The Federal Council formally authorized the transfer to the DOJ of identity data concerning the 10’000 employees. This is inconsistent: in 1997, in exactly the same sort of circumstances, two banks asked for a similar authorization to respond to DOJ requests. The Federal Council refused it at that time considering that Swiss banking laws prevented such.

Can it be said that, by instilling fear in these Swiss bankers, the U.S. is sentencing them to Switzerland?  Switzerland would be considered a country-club prison, but these guys are not used to being locked into Switzerland.  One would then need to pay attention to the statute of limitations for that would be when the "sentence" to Switzerland ends.  The statute, 18 USC Section 3290, here, is straight-forward - "No statute of limitations shall extend to any person fleeing from justice.".  Normally, being a fugitive would connote leaving one's normal place of residence or operation so as to evade discovery or arrest.  Would staying in the country of one's normal place of residence or operation (or avoiding coming to U.S. or a country with an applicable extradition treaty) be the functional or statutory equivalent of being a fugitive?  I would suspect so, but have not researched the issue.  If so, the Swiss bankers might have an effective life sentence.  And, in any event, of course Section 6531, here, excludes from the statute of limitations for tax crimes defined in the internal revenue laws the period of time that the person is "outside the United States."  Swiss Bankers are normally indicted under the defraud / Klein conspiracy statute, 18 USC Section 371, here, but enablers functionally equivalent have been indicted for tax crimes such as tax evasion, Section 7201, here, and tax obstruction, Section 7212, here  And, as I have previously noted, the specter of the sealed indictment discovered only when entering the U.S. or a country with an extradition treaty may hamper one's appetite for travel.  See Sealed Indictments - A Primer (7/11/12; revised 7/12/12), here.