Ex-Banker says he's Giving Wikileaks Files on Rich

Earlier today a former Swiss banker on Monday supplied documents to WikiLeaks that allegedly contain information about 2,000 account holders. Rudolf Elmer is an ex-employee of Swiss-based Bank Julius Baer.

The Associated Press reports:

He has previously offered files to WikiLeaks on financial activities in the Cayman Islands and faces a court hearing in Zurich on Wednesday to answer charges of coercion and violating Switzerland's strict banking secrecy laws.

"I do think as a banker I have the right to stand up if something is wrong," said Elmer, who addressed reporters at London's Frontline Club alongside WikiLeaks founder Julian Assange.

"I am against the system. I know how the system works and I know the day-to-day business. From that point of view, I wanted to let society know what I know. It is damaging our society," Elmer said.

Assange praised the ex-banker's attempts to expose alleged shady practices in the financial industry. He was making a rare public appearance since he was released on bail on Dec. 16 following his arrest on a Swedish extradition warrant.

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Swiss, German Finance Ministers to Sign Tax Deal

From the Associated Press:

Switzerland and Germany are poised to sign a deal that will make it easier for Berlin to obtain information on suspected tax cheats hiding assets in secret Swiss bank accounts, officials said Wednesday.

The agreement — whose broader purpose is to prevent companies and individuals from being taxed twice — includes a clause to help resolve what has become a long-running and at times acrimonious dispute between the two countries.

Swiss Finance Minister Hans-Rudolf Merz is due to meet his German counterpart Wolfgang Schaeuble in Bern late Wednesday to complete the deal, which requires Switzerland to lift its strict banking secrecy laws in future cases of suspected tax evasion. They will also declare their intention to find a solution for billions of euros (dollars) in untaxed German assets already sitting in Swiss vaults, officials said.

Berlin has long accused Switzerland of shielding German tax cheats by only helping foreign authorities investigate outright tax fraud but not the lesser offense of tax evasion.

Last year Schaeuble's predecessor, Peer Steinbrueck, called for governments to use "the whip" against Switzerland, while his party colleague Franz Muentefering of the center-left Social Democrats said that "in the old times one would have sent in troops" to combat tax havens. The remarks prompted outrage in Switzerland.

Swiss Warn Banks Over Offshore Accounts

Swiss banking regulators warned financial institutions in the country that they need to overhaul their services yesterday to prevent another legal battle with the IRS. According to the Wall Street Journal, the regulators suggested banks limit the risk of being pursued by U.S. authorities like USB was earlier this year.

"In its capacity as supervisor, Finma expects institutions to take due account of foreign supervisory legislation in particular, and to define a service model appropriate for each individual target market," Finma said in a statement.

The cost of doing business—both monetary and in reputation—with wealthy foreigners has risen considerably since the U.S. and European Union member states began piling pressure on Switzerland, eager to get at tax income from undeclared funds held in Swiss banks.

The highest-profile case is UBS, which was pursued by U.S. authorities in the criminal as well as civil courts over hidden Swiss accounts. UBS ultimately admitted wrongdoing, paid $780 million to defer criminal prosecution, and handed over thousands of sets of data on clients to set aside the litigation. The U.S. is expected to set aside the civil court case shortly.

The UBS case has wide implications for other Swiss banks, many of which have traditionally dealt with assets of foreign clients, some of it undeclared, according to private bankers.

Last year, Switzerland ceded some ground, finally bringing it in line with standards laid out by the Organization for Economic Cooperation and Development. For example, it now helps foreign nations pursue tax evaders as well as outright cheats.

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UBS Customers: You May Want To Call The IRS Right Now

Customers of UBS that have not come clean about their association with the troubled financial giant should speak up before it’s too late. After a lengthy debate, the Swiss Parliament and UBS have agreed to finally release the names of 4,450 clients.

According to the Business Insider, if you've still got a secret Swiss bank account with UBS that you haven't told IRS authorities about, now may be the time. You may have mere hours to do so, before the Swiss do it for you, according to Bloomberg.

The Swiss Parliament recently passed a law forcing UBS to reveal the names of 4,450 clients.

One New York law firm, Rubinstein & Rubinstein LLP, said they've been getting, "panicked calls all week."

So, if you happen to be, or think you might be one of the 4,450, it might be time to make some phone calls.

Swiss Upper House Backs UBS Deal With U.S.

On Thursday, a Swiss and U.S. deal to end the tax dispute involving UBS was approved by the upper house and is closer to being approved by the full Parliament. The lower house is expected to vote on the deal next week and many predict they will give the package a thumbs up as Switzerland’s main political party officially took back their objection to the deal in May.

“The vote of the SVP will also be key in the lower house,” said Fabio Abate, a member of the Liberal Party who sits in the lower house. “But I think in the end a majority should back the UBS deal.”

However a green light is not yet certain.

“I think it will be slightly more difficult in the lower house,” President Doris Leuthard of Switzerland told the television network SFInfo when asked about the chances of the lower house supporting the UBS deal.

The upper house also voted on Thursday against allowing a referendum on the tax deal. But the question is still open on whether the lower house would do the same, Mr. Abate said. A referendum would delay by several months the UBS agreement from coming into force.

Continue reading at NY Times.com…

Informant Says He Will Assist Further in Tax Case Against Swiss Bank

Bradley Birkenfeld, a former UBS banker and informant in the UBS case is now saying he can further assist in the tax case against the bank. He was slated to start a three year prison sentence early in January, but is reportedly hoping that additional cooperation with the government will reduce that sentence.

As this article on NYTimes.com explains, Birkenfeld was sentenced in August, but filed a new postponement request earlier this week with a federal district court in Florida.

The filing also requested a hearing to reconsider the 40-month sentence imposed on Mr. Birkenfeld on Aug. 21.

Prosecutors described Mr. Birkenfeld as the man most responsible for igniting an investigation into rich Americans’ use of secret Swiss bank accounts to avoid taxes. Partly because of Mr. Birkenfeld’s disclosures, UBS has agreed to disclose to the United States the names of 4,450 wealthy Americans suspected of hiding assets and dodging taxes in secret accounts.

The United States Treasury loses an estimated $100 billion a year to offshore tax cheats.

The Ex-Wives Club of UBS Tax-Evaders

From the Wall Street Journal:

Let’s say you are a multimillionaire divorcee. You cleverly hid half your assets from your wife during the divorce settlement 10 years ago by stashing them in Switzerland.

So while she is scraping by on $20,000 a month in alimony, you are living large off the monthly cash flow from Zurich.

Now comes the UBS settlement, and the naming of the names.

An article in Time magazine quotes New York divorce lawyer Raoul Lionel Felder saying he is getting calls from multiple clients who want to know what they can do to get their share of the cash they suspect their ex–loved ones secreted away in Switzerland.

“You see allegations of Swiss bank accounts in divorce proceedings all the time,” says Felder, whose clients have included Rudy Giuliani and Robin Givens. “A lot of divorces are going to get opened up.”

And it doesn’t matter when the divorce took place. There is, apparently, no statute of limitations for divorce in most states, so even divorces of 30 years ago could be resurrected.

US, Swiss Cement Deal On Secret UBS Bank Accounts

From Huffington Post.com:

The Swiss and U.S. governments announced a deal Wednesday to settle American demands for the identities of suspected tax dodgers, despite Switzerland's vaunted bank secrecy. However, they kept all details under wraps, including how many of the 52,000 names sought by the IRS from banking giant UBS AG will be revealed.

Depending on the scale of the deal, it could be a new blow to Switzerland's reputation as a safe place to hide assets from the taxman back home.

Switzerland has long been under pressure from European neighbors and the U.S. to open its bank records for foreign tax authorities. The IRS case against UBS has been partly credited with pushing the Swiss government to agree in March to comply with tax investigation rules from the 30-nation Organization for Economic Cooperation and Development. UBS earlier this year named about 300 American clients in a separate case.

William Sharp, a Florida tax lawyer who represents American UBS clients, said he expects the agreement to allow Swiss authorities to interpret bank secrecy laws more broadly and allow a "substantial handover" of names.

"I would guess that the U.S. would not enter into this agreement in the absence of a major fine and penalty without having at least several hundred if not thousands of names turned over," Sharp said.

The IRS in February asked U.S. District Judge Alan S. Gold in Miami to force Zurich-based UBS to turn over names of some 52,000 American clients believed to be hiding nearly $15 billion in assets in secret accounts. UBS and the Swiss government had resisted, arguing that to do so would violate Swiss banking confidentiality laws that date back centuries.

The Swiss and U.S. governments announced in late July they had agreed in principle on major issues but released no details. They had hoped to present a final deal at a hearing Aug. 7, but resolving the differences took longer.

On Wednesday, lawyers for the U.S. and UBS told the judge in a brief conference call they had sealed the deal.

Settlement Near in UBS Tax Evasion Case

According to the Associated Press the U.S. and Swiss government are close to reaching a deal over recent allegations that American taxpayers were using accounts to avoid paying taxes on the funds. The Federal government had planned to take UBS (the largest Swiss bank) to trial, but a Florida judge has canceled the trial after word broke that negotiations between the governments had been fruitful.

Justice Department attorney Stuart Gibson said Friday in a conference call with the judge that major issues have been resolved. He did not disclose details.

U.S. District Judge Alan S. Gold agreed to cancel a trial that was supposed to begin Monday.

The dispute involves about 52,000 Americans the U.S. believes are hiding billions of dollars of assets in UBS accounts. The bank and Swiss government say the names cannot be disclosed without violating long-standing Swiss bank secrecy laws.

U.S. Secretary of State Hillary Clinton and Swiss Foreign Minister Micheline Calmy-Rey are scheduled to discuss the issue Friday in Washington.

Picking on the Swiss – the Obama Administration Blows up a Tax Treaty

As the IRS and Justice Department continue to work with USB, the largest bank in Switzerland, to hand over the names of 52,000 U.S. taxpayers with private accounts, some experts are beginning to wonder if this really is a good move by the new administration. Obama just returned from a diplomatic journey around the world, and now as the Federal Government puts pressure on UBS, they might end up ruining our long and peaceful relationship with Switzerland.

According to the Wall Street Journal, “this sort of fishing expedition expressly violates the U.S.-Swiss treaty on sharing tax information. The original treaty dates back 30 years, and under the pact the Swiss regularly provide the IRS with information on specific cases. But what the IRS is attempting here is a mass search of U.S. taxpayers merely for banking in Switzerland.”

This is not to say that everyone caught up in the IRS's dragnet is pure. But the American system of justice contains probable cause and reasonable search requirements precisely to prevent law enforcement from rounding up everyone who might conceivably be guilty of some crime. And while the Justice Department argues that UBS systematically marketed its private banking services in order to avoid U.S. taxation, the charges against UBS itself were settled in February, so this is not about the bank. It is about its customers, and an effort to grab perhaps a couple of billion dollars in allegedly unpaid taxes.

Those customers are protected by Swiss bank-secrecy laws that make it a felony to improperly disclose client identities. Those laws are very much in force, and the Swiss authorities have threatened to seize the client data demanded by the U.S. rather than permit UBS to comply.

Switzerland is a neutral country and so technically isn't an American ally, but it has long been a good friend, representing U.S. interests in Cuba and Iran, among other good offices. On Monday, Judge Alan Gold delayed until August a hearing on the case, giving UBS and the feds time to reach a settlement before the judge rules on the IRS demands. The Justice Department is nonetheless still threatening to indict UBS if it fails to comply.

US-Swiss Tax-Evasion Hearings Set In Fla.

The date of the hearings for the US-Swiss tax evasion cases have been set for this July in Florida. The case is already drawing global publicity, as so many different economies are being affected by off shore tax evasion.

Earlier today the Examiner posted a new article on the topic. Check out a snippet of their story below, and be on the look out for an entry I am working on that will explain how offshore tax evasion affects you!

During the global economic crisis, Switzerland, like other havens for tax evasion, have been increasingly facing scrutiny. Alongside the US, Germany, France and Britain have also been pressuring Switzerland to assist them in closing loopholes for tax evasion. A federal Florida judge has set hearings on July 13 to 15 on the Internal Revenue Service's endeavor to obtain 52,000 names of U.S. account holders of the UBS AG.

Initially, UBS refused to release 52,000 names, since it stated the release would violate the privacy laws of Swiss banking. UBS has already paid $789 mil. in fines and agreed to settle allegations it helped Americans evade taxes. The UBS holds $2 trillion in foreign money and its financial services constitute 12 percent of Switzerland's economic output.

"This Administration is committed to reducing off shore tax evasion to help ensure that all U.S. taxpayers are playing by the same rules," Timothy Geithner, the Secretary of Treasury, said in a Friday press release.

The UBS has proposed to release data on some of its American account-holders----with no names or account numbers attached.

Swiss Seek U.S. Tax Deal Before UBS Case Continues

From Reuters.com:

A looming court case against Swiss bank UBS AG could prove a stumbling block to the United States and Switzerland clinching a tax agreement this week.

Switzerland, whose private banks manage around $2 trillion of foreign wealth, aims to secure 12 new bilateral tax deals by the end of 2009 which could allow it to be removed from an OECD "grey list" of states which need to improve tax cooperation and avoid possible sanctions from G20 nations.

It has already secured five agreements, with Denmark, Norway, France, Mexico and one other unnamed country, and plans to put the issue to a referendum. Talks between Swiss and U.S. officials restart in Washington on Tuesday.

Swiss President Hans-Rudolf Merz has asked U.S. Treasury Secretary Timothy Geithner to drop a tax evasion case against UBS in return for a new tax accord, which might struggle for ratification in Switzerland if the U.S. Internal Revenue Service (IRS) persists with its pursuit of the bank.

"We believe there has to be some kind of agreement before July 13 when the IRS and UBS are due to take part in a mini-trial," said analyst Teresa Nielsen at Vontobel, adding this could even come in an 11th hour deal on July 12.

UBS To Pay $780 Million In Tax Conspiracy Case

From Marketwatch.com:

UBS AG agreed to pay $780 million for helping U.S. customers avoid taxes, the Department of Justice said Wednesday.

Switzerland's largest bank also agreed to turn over the identities and accounts of some of its U.S. clients to the American government, in an unprecedented move that could shine a light into the country's secretive banking industry, the DOJ added.

UBS entered into a deferred prosecution agreement on charges of conspiring to defraud the U.S. by impeding the Internal Revenue Service. The government will dismiss the charges if the bank fulfills its obligations under the agreement, the DOJ explained.

Chart of UBS

"A veil of secrecy has been pulled aside," John DiCicco, acting assistant attorney general of the Justice Department's Tax Division, said in a statement. "We will continue to aggressively pursue those who shirk their federal tax obligations or assist others in doing so."

In June, a U.S. District Court gave the IRS permission to serve UBS with a so-called John Doe summons. The summons demands information that would help track down U.S. taxpayers with UBS Swiss bank accounts that they've been trying to hide from the IRS. Usually, such summonses have to specifically name individuals, so the broader John Doe version has the potential to uncover many more possible tax evaders.