A Swiss private bank that is said to be Zurich's oldest has agreed to pay the U.S. Justice Department US$22 million, in return for avoiding prosecution on grounds that it had helped certain of its American clients to avoid their U.S. tax obligations.
In a statement, the U.S. Justice Department said Rahn+Bodmer had helped 340 US taxpayers to hide assets and funds in Swiss accounts, causing a tax shortfall for the U.S. of around US$16.4 million between 2004 and 2012.
"The agreement requires R+B to provide ongoing assistance to the Department of Justice and to pay a total of US$22 million in restitution, forfeiture, and penalties," the statement said.
"If R+B abides by all of the terms of the agreement, the [U.S.] goovernment will defer prosecution on the Information for three years, and then seek to dismiss the charge."
Published accounts of the matter noted that the deal represents one of the last by a Swiss bank charged in connection with helping Americans to hide offshore accounts, in the wake of a U.S. crackdown that began some years ago.
A spokesperson for Rahn+Bodmer said the bank did not comment on the facts of the case and referred questions in this regard to the Department of Justice's statement.
As for the amount the bank is being obliged to pay, the spokesperson said it was "fully covered by provisions made in the past, and therefore does not affect the current profit and loss statement of Rahn+Bodmer Co.
"With equity capital still well over CHF200 million, the bank remains very well capitalized."
In its coverage of the Rahn+Bodmer news, the Swiss news website Swiss.Info.ch noted that the charges against R+B and the other Swiss banks that have been caught enabling American citizens to hid assets outside of the U.S. came in the wake of a major U.S. offensive against tax evasion that began in 2014 and targeted "numerous Swiss banks" before going on to impose "total financial penalties of well over US$1 billion."
U.S. pressure on Swiss
banks said to continue
As reported, the U.S. hasn't given up pressuring Switzerland's financial institutions to provide information on certain of their American account-holders, however, although it now has a new weapon – the U.S.anti-tax evasion law known as FATCA that began to be enforced in Switzerland in 2014 – a Swiss government document that came to the attention of the Swiss media in December revealed.
Finews.com, a financial news website, noted that that many of the 12 banks and one fiduciary firm that were mentioned in the Swiss government document had been among those that had "elected not to take part" in a program that had been agreed in 2012 between the U.S. and Swiss governments, whereby those Swiss banks that agreed to participate would be able to come clean on any then-undeclared U.S. accounts, and thereby avoid prosecution.
The U.S. has actually been coming after Swiss banks since sometime around 2005, when a series of revelations by various whistleblowers and others, including ex-UBS banker Brad Birkenfeld, began, and prompted the U.S. authorities to begin cracking down the use by U.S. citizens of non-U.S. banks to hide their assets.
Birkenfeld, an American who had been working in UBS's Geneva offices, went on to become famous for having approached the U.S. Justice Department in 2007 to blow the whistle on what he knew to be going on at the bank, only to end up in prison, having been given a 40-month sentence for his role in helping American clients to avoid their U.S. tax obligations.
Then, while still in prison, with 10 months of his sentence to go, he applied for, and was given, a whistle-blower award of US$104 million, the largest such award ever – and permitted to walk free. Birkenfeld went on to write a book about it all, published in 2016, called Lucifer's Banker, which was updated and republished last year, as Lucifer's Banker Uncensored.
To read more about Birkenfeld, his books and his experiences as a Swiss private banker, click here.
- AXFNJ Podcast: Dems Abroad’s Rebecca Lammers discusses the ‘suffocating’ U.S. expat tax situation with AXFNJ’s Richardson
- Accidental Americans group launches appeal, after DC court dismisses renunciations case
- Canadian court rules against 'Gwen and Kazia' challenge of FATCA information-sharing law's constitutionality
- New European Parliament 'update' of 2018 report on FATCA said to acknowledge many FATCA critics' concerns
- Mixed response in Expatland as U.S. Treasury unveils plans for new FATCA reporting 'guidance' for 'FFIs'