Ex-Banker for Credit Suisse Pleads Guilty as Offshore Crackdown Continues

One by one, the giants of Swiss banking have fallen. They have been forced to submit to the long-running American enforcement crackdown on offshore accounts.

That crackdown is not only long-running; the standards for compliance have been stepped up since Congress passed the Foreign Account Tax Compliance Act (FATCA) in 2010.

The first Swiss giant to fall was UBS. In 2009, the company paid $780 to resolve charges of helping U.S. evade U.S. taxes through foreign accounts. More recently, Credit Suisse Group AG paid $2.6 billion as a result of similar charges.

The ripple effects from big cases like these continue to unfold in the offshore banking community. This week, a former bank for Credit Suisse pleaded guilty to criminal tax charges.

The former banker is an Italian citizen and Swiss resident who managed accounts for U.S. taxpayers with Credit Suisse from 2002 to 2009. In this role, he conspired to conceal foreign accounts held by U.S. taxpayers.

This cost the U.S. more than $1.5 million in tax revenue. The former banker now faces a prison sentence of up to 5 years for this conduct.

To be sure, U.S. authorities don’t win them all when bringing offshore tax evasion prosecutions. For example, a former UBS banker gained an acquittal on tax evasion charges.

Overall, however, the trend line is clear. U.S. taxpayers with foreign accounts continue to face an enforcement crackdown and enhanced reporting requirements due to FATCA. This has made compliance more difficult and the possibility of civil or criminal charges all too real.

Concluding note: If you have not filed your Report of Foreign Bank and Financial Accounts (FBAR or FinCEN Form 114), you have until June 30 to do so. See our June 12 post for more information.

Tags: Blog, Tax Crimes