from
(snip)"NEW YORK (AP) -- The U.S. Justice Department called Switzerland's largest private bank a fugitive from justice on Friday after it didn't send any representatives to a court hearing in New York, where it has been charged with conspired with American clients to hide $1.2 billion from the Internal Revenue Service.
Wegelin & Co. is accused of helping at least 100 U.S. clients conceal huge sums of money from the IRS in overseas accounts. Federal prosecutors said the bank recruited American customers who were concerned about possible prosecution for tax violations at home, including some that had already pulled money out of other Swiss banks because of growing pressure from U.S. law enforcement. Three of the bank's client advisers were indicted in January. The bank was added as a defendant in the case on Feb. 2
U.S. officials, however, have yet to find a way to move the case forward. The three Wegelin advisers charged in the case, Michael Berlinka, Urs Frei and Roger Keller, have not been arrested and the Justice Department has decided that any attempt to extradite them from Switzerland is unlikely to succeed.
The bank was summoned to appear before a federal judge in New York on Friday at 3 p.m., but neither a bank officer nor a lawyer showed.
In a statement issued in Switzerland after the court hearing, the bank said it had not been properly served with the criminal summons, and was therefore under no obligation to appear in court.
As for the charges, the bank suggested that there was a conflict between US and Swiss law.
"The circumstances create a clear dilemma for Wegelin & Co: If it were to adhere to current US legal practice aimed at Swiss banks, it would have to breach Swiss law," the statement said.
The bank added that it would "make every effort to resolve this matter within the boundaries of respectful cooperation."
It is unclear what prosecutors can do next. Wegelin doesn't have an office in the U.S. Federal authorities have frozen $16 million that the bank had in a correspondent account in the U.S., but that amount is tiny compared to the large sums involved.
U.S. District Judge Jed Rakoff, who is presiding over the case, asked prosecutors to make a proposal on how to move the prosecution forward, and suggested involving the State Department, but the hearing ended without any immediate resolution."(snip)
Take-away from this news report is that the IRS has been successful in pressuring UBS and other 'public' Swiss / International banks to dump the accounts of US citizens, both the uber-rich and those less well off ( like me LOL ! ) by imposing new IRS reporting requirements, and by threats of prosecution / seizure of US branch employees / assets. However, Swiss Bank Wegelin has decided to 'go to the mat' with the IRS over the issue of bank 'secrecy' - primarily because Wegelin has no US branches or employees for the IRS to prosecute, and also because as a 'private' bank Wegelin never accepted accounts from any Americans who were merely 'upper middle class'. As such, any American citizen with more than a million dollars to deposit, and a passport for a trip to Switzerland, can be pretty much assured that their Wegelin account's assets ( and future earnings on those assets ) will be kept completely secret from the IRS.
So much for the concept of 'taxing the rich' !
Unfortunately, because of the 'private banking' minimum deposit requirements, non 'uber-rich' US citizens with merely tens of thousands of dollars, or just hundreds of thousands of dollars, need not apply ! Our assets and earnings can no longer be placed in offshore accounts without full reporting to the IRS ( if any offshore bank will still allow US citizens to open accounts involving deposits under $1 million - most won't because they don't want to bear the burden of the newly required IRS reporting ), and as such will remain fully exposed to ( rising ) US taxes.



Reply With Quote


Bookmarks