White-Collar Crime

US Tax Probe 'May Spread Like Wildfire' After UBS Settlement

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As a Sept. 23 deadline looms for tax-evaders to obtain lesser penalties by disclosing offshore accounts to the Internal Revenue Service, one observer predicts that a federal probe of foreign banks may expand exponentially following a $780 million settlement by UBS AG.

After the Swiss bank’s agreement to disclose information about some 4,500 of its own once-secret account holders and a flood of self-reporting by customers of UBS and other foreign banks “it is very possible that the IRS will be able to get strangleholds over the other banks because they’ll have specific information which will permit them to bring specific allegations of wrongdoing before the U.S. courts,” attorney Robert Fink of Kostelanetz & Fink in New York tells Bloomberg. This thing may spread like wildfire.”

Fink’s firm is handling 250 client disclosures to the IRS. He says they have implicated a dozen Swiss banks and others in Belgium, England, Germany, Hong Kong, Italy and Singapore. Other lawyers say the finger has also been pointed at banks in Israel, the Bahamas, Granada and the Cayman Islands.

In addition to U.S. residents who have evaded income tax by concealing assets, bank managers who helped them do so could also be at risk of criminal and civil penalties.

Additional and related coverage:

ABAJournal.com: “Harvard Law Donor Faced $100M Tax Probe at Time of Suicide, Source Says”

ABAJournal.com: “Ex-UBS Banker Gets 40 Months in Swiss Bank Account Case”

ABAJournal.com: “Swiss Attorney Charged in UBS Case; US Lawyers Could Be Targeted, Too”

ABAJournal.com: “US Clients of UBS Mull Options as Feds Press Swiss Bank to Name More Names”

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