US Spreads Tax Evasion Net To More Countries

A US task force targeting banks allegedly helping tax dodgers has widened their net to more countries, a congressional committee in Washington has heard.

The US Justice Department was thought to be focussing on Swiss banks – but the investigations have now expanded to other banks in India, Israel, Liechtenstein, Luxembourg and across the Caribbean.

Deputy Attorney General, James M Cole also reported that since 2009, his task force had charged 73 and 35 advisers with tax evasion.

“All but one admitted their guilt or were convicted by the courts,” said Cole, in his statement to Congress.

“Not only that but 43,000 other taxpayers with funds hidden offshore have come forward and paid $6 billion in back taxes. The investigations in Switzerland and the other countries are ongoing.”

Banking secrecy

Cole also told the congressional committee that the Justice Department were investigating 14 Swiss banks, including international banking giant Credit Suisse, whose chief executive Brady Dougan was quizzed by senators yesterday.

“Only a small group of Swiss-based private bankers were to blame for helping US clients dodge taxes and that management had been kept in the dark,” he told the committee.

“The bank is fighting lawsuits in Switzerland from clients trying to prevent it from giving information to the US authorities.

“These are not the actions of an institution flouting US law enforcement or hiding behind Swiss law.”

However, the committee savaged the performance of the Justice Department and efforts to bring offshore bankers who aided tax evasion in the US to book.

“After five years, the truth is that banking secrecy is still not over,” said Senator Carl Levin, a democrat from Michigan who chairs the committee overseeing the investigation.

Swiss co-operation is a joke

“I am worried that efforts to collect unpaid taxes from hidden offshore assets have stalled.”

Levin and other senators criticised Credit Suisse executives over the bank’s behaviour.

“The whole idea that the banks and the Swiss government is co-operating with the US in this is a joke,” said Levin.

He also slammed the Justice Department for identifying just 238 Credit Suisse clients from a list of 20,000 accounts.

“Finding out who is not paying tax on these accounts is critical, and finding out their names is the first step,” said Levin.

After Credit Suisse stopped helping customers evade tax in the US, the number of accounts held by US clients dropped by 85%, the senators were told.

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