U.S. Department of Justice Pursues 20K Tax Cheats Shielded by Credit Suisse

You could call it UBS, Part II.  Back in 2009, the U.S. Department of Justice (DOJ) uncovered 4,700 names of American citizens avoiding taxes with the help of Switzerland’s largest bank, UBS.  Most notably, Beanie Babies creator and billionaire, Ty Warner, was caught in the sting that cost UBS $780 million in fines and netted the IRS $6 billion in taxes and fines from a voluntary disclosure program for petrified tax cheats. 

This time around, it’s Switzerland’s second largest bank, Credit Suisse Group (CSG) that’s in the crosshairs of the IRS.  It’s estimated that CSG is harboring offshore accounts for about 20,000 Americans and that the payouts and penalties could be much, much higher this time for the account holders, as well as the bank.  So far, CSG has agreed to pay the SEC only $196 million in fines and is stonewalling on giving any identifying information on account holders to the DOJ.  In a huge misstep last August, the DOJ gave unprecedented amnesty to all Swiss banks (excepting those under investigation), allowing them to pay a percentage of the tax penalties due on the accounts they held between 2008 and 2013 in lieu of prosecution.  Unfortunately, the DOJ made the agreements with the banks before winning approval from the Swiss government that each bank would be required to turn over the names of account holders.  Now, the banks don’t have to disclose anything.  For more on this comedy of errors and tax cheats, visit Forbes.com.