The Justice Department and the Internal Revenue Service are expanding their reach into foreign countries to find people who owe the U.S. government money, panelists said at the 31st International Tax Conference in Miami.
Mark F. Daly, the senior litigation counsel at the Justice Department’s tax division, told conferees the goal is to move beyond the investigation of Switzerland’s leading bank, UBS, which cracked centuries of offshore banking secrecy. The bank paid $789 million in penalties and handed over the names of more than 4,000 U.S. account holders.
HSBC customers were targeted next.
“We are targeting a whole host of institutions abroad,” Daly said last Friday without identifying the institutions.
About 350 people attended the panel discussion moderated by Miami tax litigator Robert Panoff.
Tony Gonzalez, the special agent in charge of the region’s IRS field office, said the agency has established outposts in Hong Kong, Bogota, Belize, Barbados, Ottawa, Panama City, Sydney and elsewhere.
“The international section is evolving so much,” he said. “Every day we are expanding.”
Daly said the Justice Department has built on the initial UBS case in 2009.
He noted the agreement this month with Wegelin & Co., Switzerland’s oldest private bank, to pay $57.8 million in fines after admitting it helped at least 100 U.S. clients conceal $1.2 billion in assets.
Wegelin announced it would cease to operate as a bank after 272 years.
Daly said the UBS accounts are leading to bankers who directed U.S. customers to smaller banks. “We see those people as extremely culpable,” he said.
Foreign bankers also are more willing to come forward with information on their clients to protect themselves. Many of these bankers can’t leave Switzerland or Liechtenstein because they know they could be arrested.
“Your former bankers, your former asset managers, your former fiduciaries are tired of being captive in their own country,” Daly said. “And that’s important because there are thousands of people out there who are recalcitrant.”