US may target 10,000 client visits by UBS bank advisors
From Genevalunch.com
US authorities may be taking a new approach to going after the names of US-based clients of Swiss bank UBS. They are reportedly asking for the names of clients its advisors saw in the US. Reuters carries a lengthy article that states this, citing Swiss newsweekly Sonntagszeitung.
The move, if confirmed, may be a compromise in the legal dispute involving UBS and the US tax authority IRS, which wants the bank to divulge details on 52,000 of its US clients. Reuters reports that 60 UBS client advisors visited the US on average three times a year, for three weeks each visit, and saw four clients a day. John DiCicco, acting assistant attorney general in the tax division of the US Justice department, in March 2008 testified to a senate subcommittee investigating the case that “An internal UBS memorandum filed with the court demonstrates that, in 2004 alone, UBS bankers traveled to the United States where they held approximately 3,800 separate meetings with US clients to discuss their clients’ Swiss accounts. (Ed. note: the Sonntagszeitung article speculates that UBS hopes that the US Dept. of Justice may acccept the names of clients visited by UBS client officials as a way to avoid violating Swiss law by having to hand over all client data demanded by the IRS).
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Swiss Banks Avoid US Clients In Wake Of UBS Vs IRS
The Wall St Journal (7/20/09) is reporting…UBS AG’s (UBS) high-profile spat with the U.S. Internal Revenue Service has made some of Switzerland’s other banks wary of looking after U.S.-based clients, prompting some to stop taking money from Americans altogether and endangering the country’s image as a private banking center…Zurich-based retail bank Zuercher Kantonalbank no longer accepts business from U.S. clients, a spokesman for the state-controlled bank confirmed. A spokesman for Basel-based Bank Sarasin & Cie (BSAN.EB), which focuses on wealthy clients, said that it no longer takes U.S. money, in part because of the U.S. pursuit of offshore funds…Others, such as cooperative Raiffeisen Group, and Migros Bank, owned by Switzerland’s largest retailer Migros-Genossenschafts-Bund, still accept U.S. funds but recently put tougher measures into place in dealing with them. Raiffeisen demands a power-of-attorney and correspondence address outside the U.S., while Migros refuses to correspond with clients on U.S. soil.
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Prominent attorney John Karoly pleads guilty to tax evasion
By Matt Birkbeck, themorningcall.com
For more than a quarter-century, attorney John P. Karoly Jr. led a charmed life, winning millions in jury awards for his clients and earning the distinction of being perhaps the Lehigh Valley’s best-known lawyer.
But Karoly’s successful and at times controversial career might have come to an end Monday, when he pleaded guilty to three counts of willfully filing false tax returns for failing to pay taxes on $5.2 million in income during 2002, 2004 and 2005.
As part of the deal, Karoly also agreed to renounce any interest in his late brother’s estate, and prosecutors will drop charges that he and two others submitted phony wills. He still faces a nonjury trial on money laundering and wire fraud charges in September.
Karoly, 59, of South Whitehall Township could serve up to nine years in prison and pay a $750,000 fine. He agreed to pay $1.9 million in back taxes to the Internal Revenue Service.
The plea means Karoly cannot appeal and probably will go to prison and face disciplinary action, including suspension of his law license or even disbarment.
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U.S. demands UBS “comply in full” in tax evasion case
By Tom Brown, Reuters.com
The U.S. Justice Department said on Tuesday it was pressing ahead with its five-month-old lawsuit against UBS AG to force the Swiss bank to identify thousands of U.S. clients with secret UBS accounts.
Despite recent media speculation about a possible settlement of the case, the Justice Department said in a brief filed with a Florida court that it was seeking to enforce tax compliance with the full weight of U.S. law.
“The United States has a strong national interest in making sure that all U.S. taxpayers comply with the tax laws, including disclosing their offshore accounts, and paying all the taxes they owe,” the department said in the brief.
The U.S. government sued UBS in February in the U.S. Southern District Court of Florida, seeking the names of 52,000 Americans suspected of using the bank to hide nearly $15 billion in assets and evade U.S. taxes.
“The United States has proven its case for enforcement. The Court should order UBS to comply in full,” the Justice Department said in its filing.
In response, a spokesman for UBS said enforcement of the U.S. summons would require the bank to violate Swiss law and was inconsistent with U.S.-Swiss treaty frameworks.
A court hearing on the U.S. government case against UBS has been scheduled for July 13.
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