Minneapolis Finder Forum MN
RegisterSearchTutorialsMemberlistLog in
Reply to topic Page 1 of 1
Californian Pleads Guilty In Swiss Bank Tax Evasion
Author Message
Reply with quote
Post Californian Pleads Guilty In Swiss Bank Tax Evasion 
WASHINGTON (Dow Jones)--A California man has agreed to plead guilty to hiding a Swiss banking account he opened with UBS AG (UBS) in order to evade federal income taxes, the Justice Department announced Friday.

Prosecutors alleged John McCarthy of Malibu opened the UBS account in 2003 in the name of a Hong Kong company and secretly moved more than $1 million to the account to avoid U.S. taxes.

UBS admitted in February to helping U.S. clients evade taxes. As part of a deal to avoid criminal prosecution, UBS agreed to pay $780 million in penalties and reveal the names of roughly 250 U.S. customers who set up sham accounts.

McCarthy's information was among the data that UBS handed over, the Justice Department said.

McCarthy is the fourth person to plead guilty to maintaining a secret UBS account.

Prosecutors said he evaded more than $200,000 in taxes through the UBS account and now owes interest and penalties.

McCarthy is facing a maximum of five years in prison and $250,000 in criminal fines. He is scheduled to appear in court on Sept. 14.

As part of McCarthy's plea deal, prosecutors agreed to seek a sentence at the low end of the range recommended by the federal sentencing guidelines.

In addition to his tax liability, McCarthy agreed to pay a monetary penalty equal to 50% of the highest balance he maintained in his UBS account, prosecutors said.

A lawyer for McCarthy did not immediately return a call for comment.

U.S. tax authorities have been seeking the names of 52,000 of the Swiss bank's American clients. The case was tied up in a heated legal battle until this week, when UBS and the Swiss and U.S. governments said they had reached a final settlement to resolve the tax probe.

Details of the settlement, including the number of client names UBS will turn over, haven't yet been released.

Reply with quote
I haven't heard why the Swiss are rolling over.

What's the point of a Swiss bank account if they are no longer going to provide confidentiality?

from one web site

The perception that Swiss bank secrecy provides a means of hiding criminal activity is, and has been for many years now, largely myth. Banking secrecy is not a protection from criminal investigations, and Swiss legal authorities routinely cooperate with their foreign counterparts in such matters. The general rule is that an activity which both the foreign government and Switzerland consider a crime will result in cooperation, including Swiss authorities examining bank account transactions.

The perception that Swiss bank secrecy can be used to hide criminal activity is due to many factors. Partly it is an historical relic; prior to the 1980s, there were a number of financial activities which Switzerland did not consider criminal, but which many other countries did. Today, Switzerland's financial legislation is quite similar to that of most other OECD countries, and financial crimes in one jurisdiction are likely to be considered criminal in Switzerland. Partly it is due to the difficulty having enough information to make a request; "fishing expeditions" cannot be done. This is quite similar to both internal and international practice in most countries, but can be used as a convenient excuse by frustrated criminal investigators. And partly it is due to specific differences in criminal law; in particular, the legal definition of what constitutes a tax crime varies considerably from country to country.

Inheritance, divorce, and civil tax matters present special problems vis-a-vis banking secrecy because these are civil rather than criminal matters...

Reply with quote
Income tax evasion is, however, considered a criminal matter.

Reply with quote
This article mentions and others have alluded to threats to prosecute Swiss banking officials criminally for assisting others to evade US taxes, and I imagine US bank regulators could make it very difficult for the Swiss to do business here if they chose to stonewall us.

I discussed this with someone over the weekend. I think the key is that tax return information from business owners is dependent on the accuracy of the info they provide to the IRS. There are safeguards and red flags, to be sure, but in large part tax officials rely on that info provided in order to calculate tax liability. If an owner or officer can divert revenues from the business and get them offshore, I really doubt the Swiss or any other offshore banker is going to ask where they came from. I believe the practice is more common than we may think.

A friend of mine knows some people associated with a fairly large local financial scandal. There are stories of currency being physically smuggled out of the country by corporate officers and inner circle employees and sent to countries with discreet banking systems. If true, the people involved are more crooked than I ever dreamed. I doubt we'll ever really know for certain.

Reply with quote
Post Swiss Bank Informant Spills The Beans 

The star witness in an IRS investigation of Swiss bankers and US tax evaders is seeking a reduced sentence for extensive assistance in the probe. Sounds like he gave them plenty.

Display posts from previous:
Reply to topic Page 1 of 1
You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
You cannot vote in polls in this forum