The Tax Times: Basel Cantonal Bank Pays DoJ USD60 Million To Settle Tax Conspiracy Charges

Monday, September 3, 2018

Basel Cantonal Bank Pays DoJ USD60 Million To Settle Tax Conspiracy Charges

According to the DoJ, Basler Kantonalbank (BKB), a bank headquartered in Basel, Switzerland, entered into a deferred prosecution agreement (DPA) that was approved on August 28, 2018 by the U.S. District Court for the Southern District of Florida. As part of the agreement, Basler Kantonalbank will pay $60.4 million in total penalties for assisting Americans to evade tax.

Bank Admits to Helping U.S. Taxpayers Conceal Income and Assets from the United States; Agrees to Pay $60.4 Million

The bank also undertook to disclose details of US accounts closed in the period 2009-2017, as well as future information regarding US-related accounts.

“The Era of Hiding Money Overseas to Evade US Tax Obligations Is over,”

Said Assistant Attorney General Richard E Zuckerman

“Financial Institutions, Professionals, and Accountholders Are on Notice That the Department Continues to Aggressively Pursue These Offenses and Will Hold Both Individuals and Entities Accountable.”

At the peak of its efforts in 2010, BKB's Zurich-based private banking branch held 1,144 accounts for US customers with an aggregate value of USD813.2 million, some of which were undeclared.

One of its external asset managers, Martin Lack, formerly of UBS, was later charged and pleaded guilty to tax fraud conspiracy. Earlier this month Zuercher Kantonalbank accepted a USD98.5-million penalty imposed by the USDoJ to avoid a similar prosecution.

Under the program, banks are required to:

Make a complete disclosure of their cross-border activities;
Provide detailed information on an account-by-account basis for accounts in which U.S. taxpayers have a direct or indirect interest;
Cooperate in treaty requests for account information;
Provide detailed information as to other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed;
Agree to close accounts of account holders who fail to come into compliance with U.S. reporting obligations; and
Pay appropriate penalties.

These Banks, Financial Instructions and Foreign Financial Advisors have made substantial efforts to cooperate with the IRS investigation, including by:

facilitating interviews that their Office with employees, including top level executives;
voluntarily producing documents in response to the Office’s requests;
providing, in response to a treaty request, unredacted client files for the U.S. taxpayer-clients who maintained accounts at their Banks or Financial Instruction; and
committing to assist in responding to a treaty request that is expected to result in the production of un-redacted client files for U.S. taxpayer-clients who maintained accounts at these Banks and Financial Instructions and with these Foreign Financial Advisors.