The man, Ernest Vogliana, is just one of several former UBS clients sentenced to probation or even prison in recent years.
Vogliana, like many other former clients of UBS, admitted to hiding money from U.S. tax authorities with help from UBS bankers. Vogliana tried to hide nearly $4.9 million from tax authorities.
Additional Arrests Imminent
In 2008, a hearing by the Senate Permanent Subcommittee on Investigations, estimated that at least 19,000 US citizens were hiding “undeclared accounts” with the help of UBS bankers.
Sen. Carl Levin (D-MI), the committee chairman, stated that these accounts held “$18 billion dollars in assets that have been kept secret from the IRS.” At the time, UBS was also being investigated by the IRS, the FBI, and the Securities and Exchange Commission.
UBS stated that “undeclared” accounts would no longer be provided as a “service” and that they were planning to weed out those existing accounts; suggesting that they would reveal such account holders to authorities.
Thus far, it seems as though UBS is making good on that promise.
Last year, The Swiss bank agreed to give U.S. tax authorities the records for more than 4,450 American clients. Vogliana is just one of the seven people that were charged by the U.S Attorney’s office last year.
Each of the seven cases involved crimes linked to hiding Swiss bank accounts. However, the U.S. is not just going after the account holders, but also seeking a penalty from the banks, too.
Millions in Penalties
UBS paid nearly $800 million in penalties to the U.S. for their participation in the tax evasion schemes in 2009. However, the U.S. is seeking stiffer penalties for other offshore banks found offering similar evasive services.
The Justice Departments wants to impose a penalty, normally reserved for private citizens, on any offshore bank found guilty of evading U.S. tax authorities. The New York Times reported on this move, last week:
“The penalty stems from the violation of a rule known as Foreign Bank and Financial Accounts, or Fbar (pronounced EF-bar), that requires American taxpayers with overseas bank accounts and foreign assets to file a special disclosure with the Treasury Department each year. The top penalty for failing to file the disclosure is 50 percent of the account balance for each year of violation, a level that can leave tax evaders owing multiples of what their accounts hold.”
The article goes on to state that this rule has a provision buried deep within the legalese that could be applied to banks and other financial institutions who are involved in such dealings. However, the types of penalties on financial institutions are still being explored.
Justice Department Cracks Down on Tax Evasion
Nevertheless, the U.S. is moving forward with its tax evasion inquiry and authorities are not stopping at Switzerland.
Earlier this month, the Justice Department petitioned a federal court to force HSBC, a London-based bank, to turn over the names of wealthy Indian-Americans. These clients are suspected of evading taxes through offshore accounts located in the bank’s Indian branch.
Prior to the request, a New York woman pleaded guilty to filing a false 2008 return in an attempt to hide $8.3 million in one of these HSBC India accounts.
With the recent Justice Department and IRS crack-downs on tax evasion, it seems inevitable that we will see more fraud cases come to trial in the near future.
It also seems inevitable that if authorities are going after the banks, as well as their clients, then we may also see the two turn on each other.
As the old saying goes, “there is no honor among thieves.”Originally published on TopSecretWriters.com