Remember the UBS Settlement? So Do More Than 14,700 Taxpayers

There apparently were a lot of Americans hoping that Swiss banking giant UBS and the Swiss government wouldn’t fold under U.S. pressure and would continue to refuse to turn over confidential customer info to the U.S. government. It turns out that after the US, UBS, and the Swiss reached an agreement in August (see http://www.financialfraudlaw.com/content/breaking-news-ubs-turn-over-info-more-4000-accounts-us-government), more than 14,700 taxpayers decided to come forward to report previously-undisclosed foreign bank accounts under the voluntary disclosure program the IRS implemented following the settlement. This figure represents almost double the initial numbers the IRS announced in October and dwarfs the number of voluntary disclosures received in 2008.

In remarks about this news, Deputy Attorney General David W. Ogden said today, “The message to American taxpayers is clear: the era of bank secrecy and hidden assets is over. We will continue to work closely with the IRS and our international partners to ensure that our tax laws are enforced fully and fairly, and that the rule of law is vindicated.”

The government’s efforts to hold U.S. taxpayers who have undisclosed foreign accounts responsible for their actions began in February 2009, with UBS’s agreement to enter into a deferred prosecution agreement, admitting guilt on charges of conspiring to defraud the United States by impeding the IRS. As part of the agreement, UBS immediately provided the United States with the identities of, and account information for, a number of U.S. UBS customers and paid $780 million in fines, penalties, interest, and restitution.

To date, the Justice Department has successfully prosecuted six U.S. customers of UBS whose information was provided pursuant to the Deferred Prosecution Agreement, and is conducting investigations of dozens of other UBS customers.