In the beginning of 2016, the Justice Department reported that it is expecting to collect over $1.36 billion from 80 Swiss banks and financial institutions that admitted to aiding U.S. taxpayers in hiding assets. The institutions entered non-prosecution agreements under the Swiss Bank Program which was launched in August of 2013. The program provides a path for Swiss banks to avoid potential criminal liability in the United States for tax-related offenses by cooperating with the Justice Department and paying hefty penalties. Banks that enter the program are required to cooperate in any related criminal or civil proceedings. The campaign against hidden foreign assets intensified in 2009 when UBS admitted to helping taxpayers evade taxes by concealing assets abroad. Since then, the U.S. has collected over $13 billion from individuals and institution in connection with hidden offshore assets.
Banks that are part of the program are also assisting the Justice Department in ways outside the courtroom. The cooperating banks have been providing the Justice Department with “leaver lists,” containing information of where former clients who were hiding assets from the IRS were transferring their assets to. This leaves a paper trail, allowing the Justice Department to know what institutions in which countries to investigate next. These banks have also assisted the Justice Department by providing paper trails for “multi-step schemes.” The schemes involve moving funds between accounts from different countries in order to disassociate those funds from the U.S. taxpayer.
The Justice Department continues to investigate whether banks, financial institutions and advisers in other countries encouraged tax evasion, including in Israel, the Caribbean, Belize and the Cayman Islands. Attorney General Loretta Lynch and other Justice Department officials have praised both the Swiss Bank Program and the Swiss government for helping to bring financial institutions and recalcitrant taxpayers into compliance with U.S. tax law.
