NBP Neue Privat Bank (Category 1 Swiss Bank) Reported Ready to Settle with U.S. Prosecutors (7/14/18)

Finews reports that U.S. federal prosecutors have offered NBP Neue Privat Bank, Zurich, a nonprosecution agreement for payment of $5 million.  Peter Hody, Swiss Bank to Settle U.S. Tax Probe (Finews.com 7/13/18), here.

The paper reports that a "[a]  dozen Swiss banks are still waiting to settle a U.S. criminal probe into help tax dodgers and cheats."  These banks were in DOJ's category 1.  The paper reports that NBP was not originally in the first category, but moved into the category when U.S. prosecutors opened a criminal probe in 2013.

Also, the other category 1 banks settling -- Credit Suisse and Julius Baer -- have been required to enter deferred prosecution agreements, whereas NBP will get a nonprosecution agreement.

It has been a while since I focused on Category 1 banks.  My list of Category 1 banks (including now NBP) shows 17 in that category.  I include my list below.  My list includes UBS which was resolved before the categories were established, but still I suspect that there may be some error there.  I would appreciate hearing from anyone with the complete definitive list of Category 1 banks.

Financial Institution or Facilitator

Bank Frey & Co. AG

Bank Hapoalim (Switzerland)

Bank Julius Baer

Basler Kantonalbank

Clariden Leu

Credit Suisse AG

HSBC Private Bank (Suisse)

Liechtensteinische Landesbank (Switzerland) Ltd.

Mizrahi-Tefahot (Switzerland)

NBP Neue Privat Bank, Zurich

Neue Privat Bank

Neue Zürcher Bank

Pictet & Cie

Rahn & Bodmer

UBS AG

Wegelin & Co.

Zürcher Kantonalbank

Addendum 10/4/18:  This list includes non-Swiss Banks.  Technically, as I understand it, only Swiss banks are in formal category 1 because it was part of the DOJ Swiss Bank Program.  However, as I became aware of other foreign banks under criminal investigation I just arbitrarily put them in category 1 so that I would have a complete list of banks under criminal investigation.  (I infer that foreign banks under criminal investigation would not be permitted to voluntarily disclose and achieve some type of favorable settlement that the Swiss banks achieved under the other categories.)

List of 14 Swiss Banks Under Criminal Investigation (3/9/14)

Here is my current list of the 14 Category 1  banks under criminal investigation with no opportunity to join the U.S. Swiss Bank initiative:

Bank Frey
Bank Hapoalim (Switzerland)
Bank Julius Baer
Bank Leumi (Switzerland)
Basler Kantonalbank
Credit Suisse AG
HSBC Private Bank (Suisse)
Liechtensteinische Landesbank (Switzerland) Ltd.
Mizrahi-Tefahot (Switzerland)
Neue Privat Bank
Neue Zürcher Bank
Pictet & Cie
Rahn & Bodmer
Zürcher Kantonalbank

I would appreciate readers advising if this list is not correct.

Addendum on 5/21/15:  I found another list, Swiss Banks Entering U.S. Client Disclosure Program (Swissinfo 10/15/14), here.  The Swissinfo list overlaps except that (i) Neue Zürcher Bank is on my llist and not on Swissinfo list and (ii) Group SCA is on the Swissinfo and not on my list.

NPB Neue Privat Bank Enters Nonprosecution Agreement (7/19/18)

As previously rumored, NPB Neue Privat Bank (NPB) entered a nonprosecution agreement (NPA) with DOJ Tax.  See DOJ Tax Press Release here.  (I previously reported that this NPA was expected.  NBP Neue Privat Bank (Category 1 Swiss Bank) Reported Ready to Settle with U.S. Prosecutors (Federal Tax Crimes Blog 7/14/18), here.

The press release summarizes the agreement and statement of facts and has links at the bottom to the following documents:

• NPB Signed Statement of Facts
• NPB Executed NPA
• NPB Signed Resolution of Board of Directors

Comments:

1.  NPB agrees to pay a $5,000,000 penalty.  The NPA does not describe the penalty.

2.  NPB sought to insulate itself generally by dealing with external asset managers rather than the U.S. taxpayers directly.

3.  NPB interpreted the QI Agreement with the IRS as permitting it to "continue to accept and service U.S. account holders, even if it knew or had reason to believe they were engaged in tax evasion, so long as it complied with the QI Agreement, which in NPB’s view did not apply to account holders who were not trading in U.S.-based securities or to accounts that were nominally structured in the name of a non-U.S.-based entity.  NPB formed this view without consulting legal counsel."

4.  NPB saw a business opportunity as U.S. taxpayers exited other Swiss banks feeling the heat from the IRS and DOJ.  As a result:

Prior to 2009, NPB had few U.S. clients. At the close of 2008, U.S. Related Accounts held approximately 8 million Swiss francs in assets.  By the end of 2009, NPB had approximately 450 million Swiss francs under management in accounts owned or beneficially owned by U.S. taxpayers, an influx of approximately 442 million Swiss Francs.  * * * 

NPB’s executives hoped that their U.S. customers would eventually fully declare their accounts and keep their money at the Bank after becoming compliant. However, NPB created no written or formal policies to encourage or mandate tax compliance and, in fact, continued to acquire and service non-compliant U.S. taxpayers. 

According to NPB executives, beginning in August 2010, NPB decided not to open any new accounts for U.S. customers who were not tax-compliant. NPB did not memorialize this decision in any written policy nor in any executive board or management board meeting minutes. NPB knew in August 2010 that some of its existing U.S. customers were not tax-compliant, but continued to service those accounts. 

5.  NPB taxpayers now have increased costs under the OVDP -- being a miscellaneous offshore penalty of 50%.

Impact of Credit Suisse Guilty Plea on Resolution of Other Swiss Bank U.S. Tax Issues (5/21/14)

A Swiss web report has a good discussion of comments from various parts of the Swiss bank community regarding the effect of the Credit Suisse guilty plea.  Credit Suisse Deal Seen Paving Way for Swiss Banks to Settle (swissinfo.ch 5/210/14), here.  Excerpts that caught my attention are:

The Department of Justice reached the [Credit Suisse] deal after years investigating more than a dozen Swiss firms, including Julius Baer Group Ltd., the nation’s third-largest wealth manager. Many of the companies are close to settlements, said Andreas Brun, an analyst with Zuercher Kantonalbank in Zurich. 

“I expect resolutions in the next couple of weeks,” he said. 

* * * * 

'Speedy Resolution’ 

Julius Baer, which had 264 billion francs ($296 billion) of client assets worldwide at the end of April, may achieve a better deal than Credit Suisse as it has no business operations in the U.S.
“I can now see Julius Baer settling rapidly as well,” said Alevizos Alevizakos, a London-based analyst with Mediobanca SpA. In this bank’s case, four analysts polled by Bloomberg News estimated fines ranging from 400 million francs to 2 billion francs. 

Julius Baer dropped 0.8 percent to 39.4 francs as of 3:21 p.m. in Zurich today, extending the stock’s decline this year to 9 percent. 

“Removing the overhang of these tax disputes will be beneficial for any Category 1 bank,” Alevizakos said, using a Justice Department term for Swiss banks under investigation before it opened a voluntary disclosure program. “A speedy resolution in the coming weeks or months would be marginally positive for Julius Baer.” 

* * * *

Second UBS Client, Chernick, Sentenced (11/31/09)

The press reports today proclaim the sentencing of Jeff Chernick on October 30. (See, e.g., the associated press article here.) The sentence is 3 months of incarceration (no good time credit), 6 months of home confinement, and no fine. The Government had requested 9 months incarceration for the alleged substantial cooperation Chernick had given, but probably signaled the judge that some home confinement may be OK. The Government's 9 months request was 50% of the low end of the Sentencing Guidelines calculated range. The 3 incarceration and 6 months home confinement gives the Government its request of 9 months, but, as I have said before, if you must be incarcerated, home confinement is the way to go.

The sentencing judge, Judge Cohn, was unmoved by a request for probation, reasoning that a sentencing that amounts to a "slap on the wrist" is "negative publicity," which "informs the public that you can cheat on your income taxes and get away with probation."

Chernick paid back taxes and a $4.5 million penalty. In the plea agreement he had agreed to a 50% FBAR penalty, which on the reported $8 + million foreign accounts would account for most of the reported penalty.

Chernick also prostrated himself (figuratively) before the court with the appropriate mea culpa and contrition.

Chernick had accounts at UBS and NZB Neue Zürcher Bank (sometimes NZB Neue Zuercher Bank).

Chernick had attempted a voluntary disclosure (even before the special initiative was announced and found that the Government already had him in its sight.

JAT editorial comment: I am not sure I see a material difference between Rubinstein (1 year home confinement) and Chernick (3 months incarceration and 6 months home confinement).

Questions to readers: Do you see a material difference between persons who cheat through foreign accounts and persons who cheat the old fashion, historically more visible way who do not get such lenient sentencing (the ordinary cheats who are routinely sentenced to significant jail time, even post-Booker)? What is the explanation(s) for the leniency for cheating through foreign accounts? (In this regard, I assume that, at least in the gut, there may be some difference between (i) a foreign account tax cheat who funds the foreign account with U.S. tax paid money or money not subject to U.S. tax and (ii) a foreign account tax cheat who funds the foreign account with money that was subject to U.S. tax but U.S. tax was not reported and paid (e.g., funds that went to the foreign account without U.S. reporting or by claiming improper deductions).)

Credit Suisse Sends U.S. Customers Notice of Compliance with Refined U.S. John Doe Treaty Request (8/9/12; revised 8/11/12)

I previously noted in this blog that the IRS had made a double tax treaty request to Switzerland for Credit Suisse data regarding U.S. taxpayers.  The treaty request was denied for alleged over breadth, but the IRS came back with a more refined request.  The treaty request was refined.  See IRS Submits Reformulated Treaty Request for Credit Suisse U.S. Clients (8/4/12), here.  (See also all blogs on Credit Suisse here.)

I have received a copy of a notice to Credit Suisse depositors that their information is being turned over to the Swiss Federal Tax Administration (the "SFTA") for turnover to the IRS unless the taxpayer invokes Swiss processes to prevent the turnover.  I quote immediately below certain portions of the request.  I then make some comments (I do not include my copy as a pdf because it is too hard to read):

NOTICE TO UNITED STATES BENEFICIAL OWNERS OF ACCOUNTS WITH CREDIT SUISSE 

Dear Mr. ______: 

We have been informed that the United States Internal Revenue Service ("IRS") submitted a new request for administrative assistance to the Swiss Federal Tax Administration (the "SFTA") pursuant to Article 26 of the Convention of October 2, 1966 between the Swiss Confederation and the United States of America with respect to Tax on Income ("the 1996 convention").  The IRS is seeking information with regard to accounts of certain U.S. persons owned through a domiciliary company (as Beneficial Owners) that have been maintained with CREDIT SUISSE AG ("CREDIT SUISSE") in Switzerland (as applicable in a given case in the "IRS Treaty Request") at any time during the years January 1, 2002 through and ending on December 31, 2010. 

In connection with the IRS Treaty Request, the SFTA has issued an order directing CREDIT SUISSE to submit responsive account information to the SFTA.  This order is immediately executable and CREDIT SUISSE as an information holder has no right to appeal. 

[*2] 

This letter provides notice to you that the CREDIT SUISSE account of which you have or had the beneficial ownership appears to be within the abovementioned scope of the IRS Treaty Request. 

This letter also provides certain information on the Treaty Process opened by the SFTA and the steps available to you in connection with that process which are the following: 

- Consent to the SFTA's sending the account information directly to the IRS, see #1 below.
- Appoint within 20 days an agent or lawyer in Switzerland to receive all official notifications by the SFTA as described under #2 below. 

Should you have any questions, please consult the CREDIT SUISSE website at www.credit-suisse.com or call our dedicated team at CREDIT SUISSE AT 40 44 335 60 00. 

* * * * 

[*3] 

If, after comprehensive examination of your account information, the SFTA comes to the conclusion that information related to your CREDIT SUISSE account is required to be provided to the IRS pursuant to the 1996 Convention, the SFTA will render an appropriate final decision and notify your agent or lawyer in Switzerland.  The authority will then advise your agent or lawyer of your fight under Swiss law to appeal such a decision by the SFTA to the Swiss Federal Administrative Court. 

The SFTA has asked us to point out that if you choose to appeal such a decision, you should be aware that (I) Title 18 United States Code Section 3506 provides in Section (a) that "any national or resident of the United States who submits, or causes to be submitted, a pleading or other document to a court or other authority in opposition to an official request for evidence of an offense shall serve such pleading or other document on the Attorney General [of the United States] at the time such pleading or other document is submitted" and (ii) you should consult with a qualified lawyer concerning whether to appeal any such decision of the SFTA and concerning any obligations you may have under Section 3506 of Title 18 of the Unites States Code. 

[*4] 

Please be advised that CREDIT SUISSE is not able to provide any information on whether or not information with respect to a specific account will be provided to the IRS.  Because CREDIT SUISSE will not be made aware of this decision, this information can be obtained only from SFTA. 

Sincerely yours, 

CREDIT SUISSE AG

Update on Swiss Turnover of Documents Pursuant to Treaty Request (7/24/10)

I reported earlier today that the Swiss Administrative Court has approved the treaty request, thus opening the door to turnover of the 4,450 U.S. taxpayer UBS records. 

A Tax Notes Today article on 7/23/10, provides some additional information on the turnover status.  David D. Stewart, Swiss Court Blocks Transfer of Two UBS Files Pending Review, 2010 TNT 141-9 (7/23/10).  The author notes that two U.S. taxpayers have gotten a reprieve to the turnover pending further hearing. It is unclear whether this is just a slight temporal victory for those two taxpayers.

The author further notes:

So far, details about 2,500 of the estimated 4,450 UBS accounts of U.S. taxpayers have been transmitted to the IRS, according to a July 19 report in Neue Zürcher Zeitung. Nine hundred files are still being considered, and 850 have been completed but are still within the period during which an appeal can be considered. Ninety-six appeals have been filed, according to the report, and of those, 80 are similar to a separate appeal that was dismissed. * * * *

The agreement requires the FTA to complete the processing of UBS client files by August 26.

Credit Suisse Enabler Christos Bagios Plea and Sentencing (11/7/12)

Yesterday, Christos Bagios, a Credit Suisse Banker who had been in custody for some time, pled and was sentenced.  The following are the relevant documents:

Bagios Information, here.
Bagios Plea Agreement, here.
Bagios Sentencing Minutes, here.
Bagios Judgment, here.

Key features:

Defendant:  Christos Bagios
Bank:  Former employee of Credit Suisse; also involved UBS and Neue Zuercher Bank
Count of Plea:  Defraud / Klein Conspiracy (1 count)
Tax Loss:  $1,000,000 +  (See below indicating the tax loss was at least $1,086,75)
Fine: -0-
Restitution: -0-
5K1 Departure:  Irrelevant because of plea - see discussion below.
Sentence:  37 days imprisonment - see discussion below
Court:  SD FL
Judge:  Kenneth Marra (Wikipedia here)

Comments:

1.  Type of Plea.  Normally tax pleas leave sentencing in the discretion of the Judge who is guided by the Sentencing Guidelines and Booker.  This particular plea, however, was under FRCrP 11(c)(1)(C) and (3)(A), here.  In a plea pursuant to that rule, the parties agree upon the sentence.  If the Court rejects the plea as made, either party may withdraw from the plea agreement.  Obviously, such a plea takes out some of the risk of a guilty plea.  But judges have been known to reject those pleas.  One famous instance of a judge rejecting such a plea was in the Lea Fastow case, here.  Lea Fastor was the wife of Andy Fastow of Enron fame.

More Developments on Swiss Agreement with U.S. (5/29/13)

Developments on this front seem to be moving fast.  The latest report I am aware of is Julia Werdigier and Lynnley Browning, Switzerland to Allow Its Banks to Sidestep  Secrecy Laws (NYT DealBook 5/29/13), here.  Key cxcerpts:

The Swiss government said on Wednesday that it would let its banks sidestep the country’s secrecy laws to disclose names of clients in a move intended to help resolve a long-running dispute with the United States over tax evasion. 

The decision is a turning point in what has been an escalating conflict between the two countries. Switzerland’s finance minister said the move would probably enable Swiss banks to accept an offer by the United States government to hand over client details in exchange for a promise against future legal repercussions. 

“It is important for us to be able to let the past be the past,” Eveline Widmer-Schlumpf, the finance minister, said at a news briefing in Bern, Switzerland. She declined to give any details about the program, but said banks would have one year to decide whether to accept the American offer. 

* * * * 

Ms. Widmer-Schlumpf said on Wednesday that the government would work with Parliament to quickly pass a new law that would allow Swiss banks to accept the terms of the United States disclosure program. She said the new law would make it possible for banks to take part in the program, but that it would be up to each individual bank whether to participate. 

“We expect this to create the base for banks to again gain some room for maneuver so that calm can return to the sector,” she said. “We are convinced that this is a good, a pragmatic solution for the banks to emerge from their past.” 

Ms. Widmer-Schlumpf declined to say how much banks might have to pay. But she said the Swiss government would not make any payments as part of the agreement.

With this development, I am sure that the IRS will be sending a lot of John Doe treaty requests.  I reported on one yesterday involving Julius Baer.  U.S. Treaty Request for Julius Baer Domiciliary Company Accounts with U.S. Beneficiaries (Federal Tax Crimes Blog 5/28/13), here.  That deal which was negotiated before this new development picked off the worst cases -- i.e., the cases with intervening entity classified as a domiciliary company.  With this new development, the question is whether the John Doe treaty requests need be quite so narrow to get the worst cases but will be able to get the less problematic as well.

Addendum 5/29/13 9:34am:

IRS Makes Treaty Request for Wegelin Information Involving Asset Management Companies (6/15/13)

The IRS has filed a treaty request for U.S. taxpayer information from Wegelin & Company, the company that pled and went under.  See US continues hunt for tax dodgers in Swiss banks (6/14/13), here.  The following are key excerpts:

The United States tax authorities have filed a request for legal assistance to identify former American clients of the private bank Wegelin who are suspected of tax dodging. It is the fourth such request against a Swiss financial institute. 

Wegelin, which announced at the beginning of this year it would close its doors, on Friday confirmed reports that it had received notification by Switzerland’s Federal Tax Authorities to comply with the US request, based on a 1996 double taxation agreement.

A bank official added that Wegelin would submit the necessary information.

The request focuses on former Wegelin clients who were listed as beneficiaries of asset management companies between 2002 and 2012 and are suspected of fiscal fraud, according to the Neue Zürcher Zeitung newspaper on Friday. 

* * * * 

It is the fourth such demand against Swiss banks. The country’s two main banks, UBS and Credit Suisse, have also faced requests against a particular group of clients over the past few years.

JAT Comments:

Schumacher, UBS Banker Enabler, Sentenced to Probation Only and Fine (10/10/15)

Hansruedi Schumacher, a former UBS banker, who pled guilty to conspiracy was sentenced to no incarceration or home confinement, to five years probation and to fine of $150,000.  See Davod Voreacos, Ex-UBS Banker Schumacher Avoids Prison in U.S. Tax Investigation (BloombergBusiness 10/6/15), here.  My prior post on Schumacher is Schumacher, UBS and Neue Zürcher Bank Enabler, Pleads Guilty (Federal Tax Crimes Blog 4/7/15), here.

Excerpts from the article are:

“Schumacher’s willingness to come forward and subject himself to U.S. jurisdiction and cooperate, when he had no pressure to do so, cannot be overvalued,” U.S. prosecutor Mark Daly wrote in a Sept. 28 memo to the sentencing judge. He cooperated “at great peril to himself,” exposing himself to prosecution in Switzerland under bank secrecy and economic espionage laws, Daly wrote. 

After testifying at Weil’s trial, Schumacher also helped U.S. prosecutors investigating American taxpayers who hid assets from the Internal Revenue Service, Daly wrote. He is the seventh Swiss banking enabler who was convicted and sentenced. He faced as long as five years in prison. 

Only one of the bankers got prison time, former UBS banker Bradley Birkenfeld, who was a whistle-blower. Three others avoided prosecution by cooperating. 

Schumacher attorney Peter Raben said in a sentencing memo on Sept. 28 that his client could have stayed in Switzerland, where he wouldn’t have been extradited, and lived a “peaceful and anonymous existence among family and friends.” 

Instead, he chose to cooperate, which meant he “risked the scorn of his fellow countrymen for betraying their arrogance; he risked ostracism, for himself and his family; he risked expulsion from the financial marketplace, and the loss of his career,” and he risked prosecution in Switzerland, Raben wrote.

In a TNT article, William Hoke, Former UBS Banker Gets 5 Years' Probation, $150,000 Fine, 2015 TNT 194-5 (10/7/15), link not available, the author adds (internal TNT citation omitted):

  Schumacher's lawyer, Peter Raben, told Tax Analysts that his client was facing a maximum prison sentence of five years and a fine of $250,000. The sentencing guidelines call for a prison term of between 57 and 71 months and a fine of $100,000. Raben said Schumacher will be allowed to serve his probation in Switzerland. 

* * * * 

Raben also cited the requirement of 18 U.S.C. section 3553(a)(6) to "avoid unwarranted disparity among defendants with similar records who have been found guilty of similar conduct." Raben said five defendants in similar circumstances received probation and three were not prosecuted. 

The only other relevant case, which Raben described as an "outlier," is that of Bradley Birkenfeld. The former UBS employee was sentenced in 2009 to 40 months in prison for what Raben described in the motion as Birkenfeld's failure to fully cooperate with the prosecution. Birkenfeld, who is out on parole after serving 31 months, received a whistleblower award of $104 million from the U.S. government for his "exceptional cooperation" with the DOJ.  

Birkenfeld was incredulous about Schumacher's light sentence and what he perceives to be the DOJ's incompetence in pursuing individuals involved in the UBS case. 

"The DOJ fails to realize I took the greatest risks when I was the historic whistleblower and I gave them Hansruedi's name in 2007," Birkenfeld told Tax Analysts. "The DOJ failed to call me to Weil's trial in 2014. I have 104 million reasons why I am credible and they are not."

Swiss Category 2 Banks Reportedly Get Draft of NPA Agreement (10/11/14; 10/14/14)

A reader forwarded me a link to an article in Neue Zürcher Zeitung, Zoé Baches, Schock für Schweizer Banken: USA fordern totale Kooperation (11/10/14), here.  The article is in German.  My German is rusty.  So I relied on a Google translation of the article which, I think, is not perfect but better than if I had tried to translate it (not sure how much better, since I did not try very hard).  The Google translation has the title of the article as follows:  Shock for Swiss banks: USA require total cooperation.

A Reuters article in English reports on the NZZ article, Alice Baghdjian, Draft US deal for Swiss banks in tax row seeks "total cooperation" - paper (Reuters 10/11/14), here.  I rely for the comments below principally because the Google translation is not clear on a lot of points, and my inference from it alone might not  be good.

Here is my summary:

1.  DOJ has emailed the banks participating as Category 2 banks in the DOJ Swiss bank program a "Model-NPA."  NPA is the acronym for nonprosecution agreement which is what the Category 2 banks seek in the program.

2.  DOJ demands "total cooperation."  The requirements "would also apply to parent companies, subsidiaries, management, workers and external advisors"

3. Quoting NZZ: ""This total cooperation would, in addition, not only apply with respect to the DOJ and the Internal Revenue Service, but also to anyone, even foreign law enforcement agencies, that the DOJ is supporting in its investigations," with "no end date."

4.  "It is also unclear whether the requested information would only need to be handed over when doing so complied with Swiss law, the paper said."

5.  "Failure to follow any one of the terms of the agreement would render it void, and the bank could risk prosecution from the DOJ."

Although, as noted the Google translation of the German is not perfect, I infer that it says also the following (which is not reported in the Reuters article):

6.  Either within the Model-NPA or separately, the banks must commit for the future to report about U.S. taxes -- presumably violations or suspected violations.

7.  Hardliners have taken over the leadership of DOJ, mentioning Tamara Ashford, Acting AAG Tax, who is awaiting confirmation to the U.S. Tax Court.  (I don't know what this means other than that DOJ Tax will continue to do what it was doing with respect to Category 2 banks; I am not aware that Ms. Ashford is tougher on the issues than the prior AAG.)

Addendum 10/14/14 10:00 AM:

A reader, Andre Watts, sent me the following and gave me permission to post it since, for some reason, he could not get it to post as a comment.  It adds considerable nuance to the article from the German rather than the rough translations:

U.S. Swiss Negotiations for Multi-Bank Settlement on Swiss Bank Enabled U.S. Tax Evasion (6/11/11)

There are news reports that the U.S. and the Swiss Government are in negotiations regarding a multi-bank settlement regarding Swiss bank's participation in U.S. tax evasion. The source report I have seen to date is Lynnley Browning, Swiss, U.S. in talks on tax probe settlement -sources, Thompson Reuters News & Insight (6/9/11); see also Randall Jackson, U.S., Switzerland Negotiating Expanded Tax Evasion Settlement, 2011 TNT 113-6 (6/13/11); see also Randall Jackson, U.S., Switzerland Negotiating Expanded Tax Evasion Settlement, 2011 TNT 113-6 (6/13/11) (which I extrapolate may be based at least in part on Browning's article).

The takeaway for U.S. taxpayers playing the offshore financial account game -- particularly with Swiss banks -- who have not done a voluntary disclosure (OVDP or OVDI), the risk/reward ratio is rising.  Now is the time to reconsider whether to join the OVDI.  Of course, after the OVDI ends in August 30, 2011 (subject to the good faith extension to obtain the necessary documents), the IRS may still permit taxpayers to come into a voluntary disclosure program but the costs will likely rise significantly.

Addendum 6/13/11:
Matthew Allen, The IRS is building up pressure, Swissinfo.ch (6/10/11)

Schumacher, UBS and Neue Zürcher Bank Enabler, Pleads Guilty (4/7/15)

As expected, Hansruedi Schumacher yesterday pled guilty to one count of defraud / Klein conspiracy.  See Susannah Nesmith and David Voreacos, Ex-UBS Banker Schumacher Pleads Guilty in U.S. Tax Probe (Bloomberg 4/6/15), here.  Schumacher testified as a Government witness in the unsuccessful trial of Raoul Weil.  See Raoul Weil Found Not Guilty (Federal Tax Crimes Blog 11/3/14; 11/6/14), here.

The plea agreement is here.  In the plea agreement, the parties agreed that "the appropriate disposition of this case is, and agree to recommend jointly, that the Court impose a sentence of a term of probation of five (5) years."  That disposition is consistent with the sentences of Andreas Bachmann and Josef Dörig, Swiss enablers sentenced recently.  See Swiss Bank Enablers Get Unsupervised Probation and Relatively Light Fines (Federal Tax Crimes Blog 3/30/15), here.

Last night in the Tax Fraud and Money Laundering class, we covered sentencing.  Within that subject, we covered how plea agreements address sentencing matters, in getting to the "appropriate disposition."  The plea agreement thus addresses the key sentencing calculation factors as follows (with my comments in brackets):

2. The United States and the defendant jointly agree that the appropriate disposition of this case is, and agree to recommend jointly, that the Court impose a sentence of a term of probation of five (5) years.In accordance with Rule 11(c)(1)(B) of the Federal Rules of Criminal Procedure, the United States and the defendant will recommend to the Court that the following provisions of the Sentencing Guidelines apply:

A. Base Offense Level: 26 (U.S.S.G. §§ 2T1.1(a), 2T1.4.1(K)) [Note that the tax loss indicated by the base offense level is between $7,000,000 and $20,000,000.]

B. Sophisticated Means: 2 (U.S.S.G. § 2T1.1(b))(2))

C. Acceptance of Responsibility: - 3 (U.S.S.G. § 3E1.1(a) and (b))

D . Total Offense Level: 25 [The Sentencing range per the Tax Table is 57-71 months.]

3. The parties respectfully submit that they will be making a joint recommendation, pursuant to 18 U.S.C. § 3553(a) and U.S.S.G. § 5K1.1, [Substantial Assistance Departure] that the defendant be sentenced as follows;

A. That the defendant be placed on probation for a period of five years;

B. That the defendant pay a fine of $150,000;

C. That, in addition to the standard terms and conditions of probation, the Defendant be required to (i) abide by all terms and conditions of Paragraph 5, infra, concerning his duty to cooperate under this Plea Agreement, and (ii), to facilitate that cooperation, the defendant be required to return to the United States as requested as part of his requirements under Paragraph 5, infra;

D . That based upon the nature of the tax loss and liabilities in this case, which were personal to each taxpayer, as opposed to the defendant, an order of restitution not be imposed.

U.S. Group Requests to FTA for U.S. Individual NonConsenteng Account Information (6/30/21)

It’s been quite some time since I paid any attention to the application of FATCA with Swiss Banks and how information of U.S. taxpayers' accounts are reported to the IRS under FATCA.  To provide a high-level summary, for U.S holders of accounts not consenting to automotive disclosure to the IRS of account information, those banks are required to make aggregate disclosures to the Federal Tax Administration ("FTA") which provides the aggregate information to the IRS.  For Swiss Banks that report in the aggregate, the IRS may make “group requests” through the Administrative Assistance procedure that requires the Swiss Banks to disclose the individual account information.  The Swiss Federal Tax Administration discussion of the process is here; the IRS discussion and links describing the general process is here; the IRS description is here  Individual account owners are notified of the request either by notice to the notice information with respect to the account or by publication in Switzerland and may appeal (good luck with that).

Group requests are requests requiring the FTA and the Swiss Banks to get information through account characteristics where the name of the account holder is not known to the requesting authority (here the U.S. competent authority).  I don't know what characteristics a provided in some format like database fields, but imagine that the fields may include (i) amount in each account on the FBAR reporting date; (ii) high amount during the report year; (iii) whether the client had some type of no mail instruction or mail instructions for a non-US address; and other similar characteristics.  The IRS through the competent authority could then ask, for example, for (i) all accounts which in the aggregate for the Bank equaled or exceeded $500,000 on the reporting date or during the year; or (ii) all accounts with aggregate amounts of $250,000 for accounts any of which had a no mail instruction or mail to a non-US address.  There are a number of other characteristics the IRS might specify that would "mine" the "have value" targets requiring that the Banks disclose.

 The IRS has made several group requests starting in December 2020.  The latest request (the 5^th request) was June 28, 2021, with the aggregate banks for whom requests were made as follows (a copy and paste from the FTA page, here; note that some Financial Institution names may be slightly different on my spreadsheet): 

DOJ Tax Budget Request: Promo Piece with Some Statistics (9/19/12)

I am not sure exactly when this came out.  The pdf copy I have says that it was created in February 2012, so I am behind in getting to it.  In any event, here it is.  Department of Justice 2013 DOJ Tax Division FY 2013 Congressional Budget, here.

Key excerpts related to criminal tax enforcement that has been blogged frequently here (some footnotes omitted):

[*1] 

To help achieve uniformity in nationwide standards for criminal tax prosecutions, the Tax Division’s criminal prosecutors authorize almost all grand jury investigations and prosecutions involving violations of the internal revenue laws. Alone or in conjunction with Assistant United States Attorneys, Tax Division prosecutors investigate and prosecute these crimes. In the last few years, the Division has authorized between 1,300 and 1,800 criminal tax investigations and prosecutions per year. 

Improving Voluntary Compliance. The Tax Division’s success rate in its litigation – more than 90% – has an enormous effect on voluntary tax  compliance. fn2 By law, the IRS cannot make public the fact of an IRS audit, or its result. By contrast, the Tax Division’s important tax litigation victories receive wide media coverage, leading to a significant multiplier effect on voluntary compliance. fn3 Efforts of the IRS and the Tax Division are having a positive effect on voluntary compliance. According to the most recent survey by the IRS Oversight Board, 87 percent of those surveyed think it is “not at all” acceptable to cheat on taxes. fn4 Also, the Commissioner’s Voluntary Disclosure Initiative, timed to coincide with the Division’s ongoing criminal and civil enforcement concerning unreported offshore accounts, resulted in an unprecedented number of taxpayers, almost 15,000, attempting to “return to the fold” and paying back taxes, interest and penalties due that will likely total in at least the hundreds of millions of dollars. As an integral part of the IRS’s enforcement efforts, the Tax Division is partially responsible for the IRS’ ability to collect over $2 trillion in taxes each year. fn5