In 2009, the US Justice Department revolutionized the pursuit of offshore tax evasion by bringing a historic criminal case against UBS, Switzerland’s largest bank. The financial giant was accused of conspiring to assist 52,000 American clients evade US taxes. UBS avoided prosecution and agreed to reveal the identity of 4,450 US customers. The IRS imposed a $780 million penalty, a minor sum compared to the UBS earnings from its tax-evading US customers. The case pierced Swiss bank secrecy for the first time and launched a US crackdown on offshore tax evasion by US persons.
Since then, the Justice Department has aggressively pursued tax evaders and Swiss financial institutions that entice them. It has targeted institutions like Credit Suisse and smaller private banks. Recent events suggest that many US tax evaders and other financial criminals are fleeing Switzerland, and that US enforcement efforts may be shifting to places like Hong Kong, Israel and Lichtenstein.
In this CrimeCast, ACFCS speaks with Jeffrey Neiman, the former federal prosecutor who handled the landmark case against UBS. He provides insight into the new Justice Department and IRS enforcement efforts against offshore tax evasion. Neiman gives practical lessons to financial institutions and enforcement agencies from his experience in the UBS case, and examines the changing focus of US efforts against banks for harboring tax evaders.