Data leaks in big banks are no longer big news. Those who think they can successfully hide money from the IRS in an offshore account are only fooling themselves. Recently an article in the Belgian newspaper De Tijd shows just how much information is out there if one wishes to look.
An investigative journalist spent months asking questions about Belgians with Swiss accounts and wound up with some startling information. That information included the identities of 2450 HSBC customers with accounts in Geneva and the records surrounding their 3137 accounts. If a journalist can get this information, imagine what the government can do.
Unlike journalists, the IRS and Department of Justice have a number of very powerful weapons in their arsenal including John Doe subpoenas and Mutual Legal Assistance Treaties. Justice officials have also been very successful in getting foreign bankers to spill the beans on their clients. How? They indict the banker and then offer a reduced sentence in return for cooperation.
Among the findings of Belgian journalist Lars Bové? He claims that just about every important diamond dealer in Antwerp had Swiss accounts and is suspected of tax evasion. Is it any different here? Probably not and we suspect that the IRS has also read Bové’s story.
What is particularly fascinating about the information uncovered by Bové is the internal bank documents. His piece is a roadmap for prosecutors. “Client is terrified that she will be exposed to the Belgian fiscal authorities,” one internal bank document revealed.
These internal documents reveal how HSBC bankers encouraged their clients to use anonymous companies in Panama and other tax havens, held secret meetings in hotels and even used code language when talking on the phone. “Client can’t be called,” one note explains. “He calls us, then uses name of a football player and asks us the price of the caviar, meaning the total amount of his assets.”
Bové’s piece uncovered the practices of Swiss bankers at HSBC with Belgian clients. It is a safe bet that these same bankers had American customers as well. As we have previously reported, Justice Department officials have been interested in HSBC for quite some time. Earlier this year the bank promised to cooperate with American officials. If you have an account at a foreign HSBC branch and have failed to file FBARs or otherwise report that account, time is running out.
We have said it before but it bears repeating – Bank secrecy is dead. The days of tax havens are numbered.
Opening a foreign account is legal if you report the account annually on your income tax return and on a Report of Foreign Bank and Financial Accounts (FBAR). Failure to report foreign accounts and file FBARs is a felony and carries HUGE civil penalties.
If you have an unreported offshore account, contact us immediately. Our dedicated team of FBAR lawyers has helped many taxpayers come into compliance and avoid penalties. The stakes are simply too high to ignore the problem or try to take on the IRS alone.
For more information, contact attorney Bethany Canfield at or by telephone at (414) 223-0464. The author can also be contacted at or by telephone at (414) 704-6731 (direct). All inquiries are protected by the attorney – client privilege and kept in confidence.
We have hundreds of text searchable articles on our Due Diligence website. Try searching FBAR, FATCA or even specific bank names such as HSBC.
Post by Brian Mahany, Esq.