by Brian Mahany
Federal prosecutors charged a former UBS banker with helping 150 wealthy American clients commit tax evasion. Christos Bagios, a Greek citizen that resides in Switzerland, was charged with conspiracy to defraud the United States. At this writing he is in custody of the U.S. Marshal but expected to be released on bail. Prosecutors say Bagios managed $500 million in assets for as many as 150 U.S. clients; clients that often failed to report their foreign bank accounts and foreign source income.
The prosecution highlights the IRS’ increasing crackdown on unreported offshore income and holdings. Previously, the government targeted the banks themselves, seeking disclosure of the names of Americans with foreign accounts. UBS, Bagios’ former employer, was the subject of a widely reported 2009 action by the U.S. Justice Department. That case ended with a record $780 million fine and disclosure of some account holders.
By criminally prosecuting the individual bank account managers themselves, the IRS is certainly sending a message that it will pull all stops to find those with unreported income.
We wonder if the pressure will become so intense that some foreign banks will simply refuse deposits from Americans.
For now, Americans with offshore problems can take advantage of the current IRS amnesty program called the Offshore Voluntary Disclosure Initiative. Participants can save significant penalties, limit how far back the IRS will look and most importantly, avoid jail.
Search our blog for more stories on the current IRS amnesty including details on the program’s procedures and rules. Taxpayers with other unreported income problems or wishing to correct previously filed questionable returns should contact us as well. In most cases we can help you avoid prosecution.
Mahany & Ertl is a boutique law firm concentrating in tax maters, fraud recovery (asset recovery) and white-collar criminal defense. Our tax practice includes tax compliance, audit defense, offshore disclosures, FBAR reporting (Report of Foreign Bank and Financial Accounts), criminal investigation defense, welfare benefit plan resolution and Tax Court litigation. Contact Brian Mahany for more details at (414) 704-731 (direct). The author is Maine’s former state revenue commissioner, former assistant attorney general tax and has decades of tax and white collar criminal experience.