The IRS keeps updating its list of foreign banks which are turning over the names of their US Account Holders, who are now subject to a 50% (rather than 27.5%) penalty in the IRS’s Offshore Voluntary Disclosure Program (OVDP). This penalty is based on the highest account balance measured over up to eight years.
In our April 18, 2013 post The Noose Tightens as Criminal Charges are brought against a Swiss Banker and a Swiss Attorney we discussed that Authorities charged a Swiss banker and a Swiss attorney with helping American clients hide millions of dollars in offshore accounts to evade paying taxes.
The case was the latest in a string of prosecutions from the Justice Department aimed at curtailing offshore tax evasion services sold by Swiss and Swiss-style banks.
Stefan Buck and Edgar Paltzer were each charged with one count of conspiracy, an indictment filed in Manhattan federal court showed. It did not name the defendants' employers. Buck is the head of private banking and a member of the executive board at "Swiss Bank No. 1," while Paltzer is a partner at a "Swiss Law Firm" and was admitted to the New York bar in 1988, according to the indictment.
Zurich-based Bank Frey lists Stefan Buck as its head of private banking and a member of its executive board on its website.
According to the Manhattan U.S. Attorney's office, which brought the charges, Buck's bank saw an increase of 300 percent in U.S. taxpayers as clients between the time of UBS's settlement and Wegelin's indictment in February 2012.
Around $938 million, or 44 percent, of the bank's $2.1 billion in managed assets as of September 2012 was held by U.S. taxpayers, prosecutors said.
Buck and Paltzer opened and managed undeclared accounts for U.S. clients who had been informed by other Swiss banks that they had to close their accounts there.
Both men reside in Switzerland, and neither has been arrested, prosecutors said.
The defendants each face fines and a maximum prison sentence of five years.
Stefan Buck, pled not guilty on November 9, 2016 to a single charge of conspiring with U.S. taxpayer-clients and others to hide millions of dollars from the Internal Revenue Service, court records indicated. Buck posted a $100,000 bond and was released on the condition that he not travel outside of the Southern and Eastern districts of New York and reside at his Manhattan residence, according to court records.
Buck’s attorney, Marc Agnifilo of Brafman & Associates PC, told Law360 on Tuesday that his client voluntarily flew from Zurich to New York to defend against the government's allegations that he conspired with U.S. taxpayers who committed tax fraud.
Paltzer, who has dual U.S. and Swiss citizenship, pled guilty in August 2013 as part of a plea deal with prosecutors in which he agreed to cooperate with the government’s case. He has yet to be sentenced, according to court records.
Bank Frey shuttered operations in late 2013 amid the fallout from the federal investigation, according to news reports.
Read more at: Tax Times blog