Former Tax Prosecutor Observes that Credit Suisse Guilty Plea is Latest
Development in U.S. Government Crackdown on Offshore Tax Evasion by American
ST. LOUIS -- May 20, 2014
Justin Gelfand, a former federal prosecutor with the U.S. Department of
Justice’s Tax Division who is now an attorney at the law firm Capes, Sokol,
Goodman & Sarachan, P.C., observes that yesterday’s guilty plea by one of
Switzerland’s largest banks is the latest sign that the U.S. government is
going after Americans with undisclosed foreign bank accounts.
“Our law firm is currently responding to inquiries from business professionals
and individuals throughout the U.S. who have contacted us about their overseas
financial holdings,” Gelfand says. “This is clearly impacting U.S. citizens in
a personal way,” says Gelfand.
U.S. Attorney General Eric Holder announced in Washington, D.C. yesterday
thatCredit Suisse AG, a Zurich-based bank that is one of the world’s largest
wealth managers, has pleaded guilty to criminal charges relating to “an
extensive and wide-ranging conspiracy to help U.S. taxpayers evade
taxes.”Holder said, “This is the largest bank to plead guilty in 20 years.
The bank will pay a total of $1.8 billion in the form of a fine of over $1.13
billion and nearly $670 million in restitution to the IRS.” Holder noted
thatthe guilty plea caps a year-long investigation ofCredit Suisseby the
“Federal authorities have asserted that Americans with undisclosed foreign
bank accounts may be found,” says Gelfand. “With FATCA and the latest public
prosecutions in this area, it is true that foreign accountholders are more
likely to be discovered today than they were at any point in U.S. history.”
FATCA, the Foreign Account Tax Compliance Act, is a law that greatly increases
U.S. government access to information about bank and other financial accounts
held by U.S. taxpayers overseas.
“As we advise clients of our firm, there are strong defenses to allegations
involving offshore tax evasion,” says Gelfand. “People who come in before the
government finds them have a number of options that may help them avoid going
to federal prison for tax crimes.”
Gelfand explains that the IRS allows for so-called “voluntary disclosures,”
through which eligible people with previously undisclosed bank accounts may be
able to avoid criminal prosecution by disclosing their accounts, filing
accurate amended tax returns, and paying penalties.
“Under the IRS’s voluntary disclosure programs, you have to come to the
government before the government knows about you,” Gelfand says. “This is a
situation where time is very much of the essence and strategy as to how to
proceed is critical.”
In its report “Offshore Tax Evasion: The Effort to Collect Unpaid Taxes on
Billions in Hidden Offshore Accounts” this year, the U.S. Senate
allegedthatZurich-based bank Credit Suisse Group AG has more than 22,000
account customers in the U.S. with assets that may total between $10 billion
and $20 billion. Credit Suisse has offices in 13 U.S. states and Washington,
D.C., and more than 50 countries.
Gelfand focuses his practice primarily on criminal defense, tax controversy,
white collar, and litigation matters. He publishes a tax fraud blog
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