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U.S. Investigation of HSBC

Recently, HSBC, one of the world’s largest banks, came under the microscope of the United States Department of Justice and the Internal Revenue Service.

The investigation began when a Virginia doctor returning from Switzerland lied to customs agents who asked if the doctor had mailed any cash to himself in the U.S. Two weeks later, law enforcement officials raided the doctor’s home and seized the 250,000 dollars in U.S. currency that the doctor sent from Europe to himself after he had been advised that HSBC would be closing the Swiss account that he had inherited in 1997.

This is just the beginning of the investigation into HSBC’s worldwide operations. It has been reported that the U.S. government is looking into HSBC accounts in Asia as well. The U.S. government seems to be committed to bringing all U.S. taxpayers with undisclosed offshore accounts into compliance one way or the other.

IRS Offshore Settlement Initiative Voluntary Disclosure Program

In 2009, the Internal Revenue Service announced the IRS Offshore Settlement Initiative Voluntary Disclosure Program, an amnesty program designed to encourage taxpayers to come forward and disclose money in offshore accounts at banks like HSBC.

In exchange for disclosure, individuals received a promise not to refer the case for criminal prosecution as well as reduced civil penalties. Over 14,700 U.S. taxpayers took advantage of the initiative and made voluntary disclosure of their accounts before the October 15, 2009, deadline. Although the deadline under the amnesty program has passed, there are a number of strategies that can still be used to prevent prosecution of and reduce penalties for holders of previously undisclosed offshore accounts.

After the HSBC Investigation: What Comes Next?

It is highly possible that the government’s investigation of HSBC is only the first part of a series of enforcement efforts. The United States has demonstrated through investigation of other banks, such as Swiss banking giant UBS, that it takes misuse of offshore financial institutions by Americans very seriously.

Current clients who have already been accepted into the Voluntary Disclosure Program have nothing to fear. However, any U.S. taxpayer who has not yet disclosed a foreign bank account located in any offshore location, particularly in HSBC, should contact an attorney immediately in order to avoid or minimize criminal and civil liability.

Contact a Lawyer Regarding the U.S. Investigation of Offshore Financial Institutions

We recommend that you contact Brown, PC, by calling us at 817-870-0025 or toll free at 888-870-0025. Headquartered in Fort Worth, Texas, with additional locations in Washington, D.C., we are dedicated to protecting the rights of clients with substantial monetary holdings in the United States and overseas.