Monday, May 03, 2010

US to Probe Thousands More Offshore Tax Evaders


The U.S. government expects to probe thousands more cases of wealthy individuals dodging taxes through offshore bank accounts, on top of the high profile case against UBS AG (UBS.N) (UBSN.VX), a U.S. tax attorney said on Monday.

"We expect over the next couple of years, in addition to the UBS cases, to have somewhere between 4,000 and 7,000 more cases coming to us with. These are from banks and governments cooperating," said Kevin Downing, a senior tax attorney of the U.S. Department of Justice, in a lecture in Singapore.

Some private banking clients are choosing to take cash from Swiss accounts and carry it by hand back to the United States, to avoid an electronic trail, only to be caught by U.S. law enforcement officers and penalized for tax evasion and illegal smuggling of money into the country, Downing said.

"When they go in and close their accounts, they are picking up brand new $100 bills ... that are coming in $100,000 shrink-wrapped bundles. Guess what? We can trace that money," he said, adding such cash would be forfeited.

Singapore was one stop in a tour of Asian cities also including Hong Kong, Beijing and Shanghai by Downing and his U.S. Justice Department team. The tour featured meetings with financial and tax regulatory bodies and bankers discussing cross-border tax prosecutions.

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