Growing Liability Risk to Foreign Financial Institutions from Tax Disclosure Cases

Federal prosecutors in the United States have decades of experience building big criminal cases.  They move methodically and rely on the induced cooperation of smaller targets, defendants whom the government believes have knowledge of others involved in the scheme.  These smaller targets — the little fish — are grabbed first and their cooperation is leveraged by virtue of their unenviable position: they can fight the government’s allegations and face the prospect of a lengthy prison sentence or, alternatively, they can cooperate against larger targets — the big fish — and be granted far more lenient treatment.  Human nature and prior experience have demonstrated that when faced with this choice, most defendants choose to cooperate with the government.

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