Story to date., in brief (see prior postings for more detail, including here and here).
Last year, a former employee of the Lichtenstein bank revealed to various countries secret bank accounts held by their citizens in Lichtenstein. The IRS engaged in a much more substantial effort to uncover the names of US taxpayers that might be hiding assets abroad in order to escape taxation from the income on those assets, especially in Switzerland and Lichtenstein. It turned out the UBS, a Swiss bank, had been illegally engaging in US-based solicitation of wealthy Americans' business. It was hawking the Swiss bank's ability to act as go-between to set up offshore dummy vehicles in which assets could be hidden without tracing to the taxpayer because of Swiss banking secrecy laws. To avoid prosecution, UBS eventually agreed to pay a fine and turn over fewer than 300 names of US taxpayers with such accounts. The US government has issued a summons for the names of holders on an additional 52,000 accounts, but so far the bank has refused, claiming it would violate Swiss law. At the same time, the Swiss and US tax authorities have been negotiating a new tax treaty. While it is purported to provide somewhat better information sharing than the current treaty, most disucssions suggest that it will remain far short of a real information sharing provision. But there have been rumors that the agreement on the treaty might be enought to "buy" the U.S.'s dropping the legal case for the 52,000 names. The Justice Depart. says not, however.
The new information.
Yesterday, Florida millionaire accountant (so he knew better) Steven M. Rubenstein of Boca Raton was the first person to plead guilty, to a charge of filing a false tax return that failed to reveal secret accounts, stemming from the UBS revelation of some of its accountholders in the plea deal. He'll face prison time, plus back taxes, fines and penalties. Rubenstein is said to be cooperating with authorities, which could make it easier to finger additional tax evaders or provide information against UBS If it is determined to have violated its settlement. Rubenstein notes that UBS "helped him set up" an offshore coropration and handled gold sales worth $2 million and securities trades worth $4.1 million over the seven years he had the accounts. The US attorney said that "[m]ore prosecutions are expected to follow." U.S. Dept. of Justice, UBS Client Pleads Guilty to Filing False Tax Return (Jun 25, 2009); Lucoff & Voreacos, UBS Client Rubinstein Pleasds Guilty Over Tax Return, Bloomberg.com, Jun 25, 2009; Florida UBS Client Steven Michael Rubinstein Pleads Guilty to Tax Fraud, Post Chronicle (Jun 25, 2009).
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