Following a deal between the United States and several Swiss banks to pay fines rather than face a criminal investigation, Zurich bank Rahn & Bodmer has disclosed that they are currently under investigation by the U.S. Department of Justice. Long known for being a tax haven for wealthy individuals, Swiss banks have been heavily targeted by American authorities over the past few years.
The Department of Justice has supposedly placed many Swiss banks into various tiers of enforcement. The second-tier banks qualified for the settlement arrangement, which will require that they disclose information related to their American customers and pay substantial fines. First-tier banks, such as Rahn & Bodmer, are not eligible to participate in the settlement. Rather, they are already under criminal investigation by the Department of Justice. Some of the other Swiss financial institutions that are currently under investigation include Credit Suisse and Zuercher Kantonalbank.
The bank, founded in 1750, is one of the oldest remaining banks in Switzerland. Wegelin & Co., the oldest bank in Switzerland, closed its doors this year after pleading guilty to criminal charges in the United States. A partner at Rahn & Bodmer said that the bank has been preparing documentation related to their U.S. business, in anticipation of being targeted by the United States. However, the bank expected that they would be eligible to take part in the settlement that has been made available to about 100 second-tier banks, rather than being subjected to a criminal investigation.
The United States has made it a top priority in recent years to crack down on offshore bank accounts that are used to evade U.S. taxes, including prosecuting banks that assist U.S. taxpayers in hiding their wealth offshore. In 2009, Swiss banking giant UBS paid a $780 million fine and provided the U.S. with information related to more than 4,000 American account-holders.
These investigations, combined with the Offshore Voluntary Disclosure Program launched in 2009, have provided U.S. authorities with information that is now being used to pursue other Swiss banks. The IRS estimates that, by the end of 2013, more than 65,000 U.S. taxpayers will have made voluntary disclosures. To date, the United States government has collected well over $5 billion in taxes and penalties from participants. In exchange for their voluntary participation, taxpayers who come forward under this program are granted immunity from criminal prosecution.
The attorneys at Brown, PC have guided many taxpayers through the voluntary disclosure process. To learn more about our voluntary disclosure practice, please visit our firm's website.