Twice before we wrote about Herve Falciani, a former computer specialist for HSBC bank in Switzerland. Falciani is a fugitive from Swiss authorities but welcomed in other European countries. Why? Because he allegedly stole the names of 130,000 client names from his former employer; names that are probably responsible for billions in unreported foreign accounts and hundreds of tax evasion cases across Europe and the world. (To see the original posts, check here and here.)
Since our last post, Falciani claims he is still hunted by Swiss authorities and that he was kidnapped by Israeli Mossad agents eager to learn the name of Israelis with unreported foreign accounts. The French government, which has long been aggressive in the hunt for tax evasion using offshore accounts, is reportedly providing him with armed bodyguards.
Spain claims Falciani’s information lead to the collection of $345 million USD and identified 650 people guilty of tax evasion. That includes the head of banking giant Banco Santander.
Falciani already turned over his treasure trove of data to the IRS and Justice Department which used his information to exact a record $2 billion settlement with HSBC.
Falciani’s story reads like a Tom Clancy thriller, except the stakes are very real. As long as foreign governments are willing to purchase or use stolen records, no one with an unreported foreign account is safe. Opening an offshore account is legal if the account is properly reported annually on an FBAR form – Report of Foreign Bank and Financial Accounts. Failure to file an FBAR – or foreign income associated with the account – is a felony.
US prosecutors have been unrelenting in their search for foreign accounts. Dozens of taxpayers with unreported accounts have been convicted of filing false tax returns or tax evasion. No matter what your beliefs are in the new FATCA foreign reporting laws, your foreign account data is also at risk because of good, old fashioned identity theft. This time, however, the thieves are being encouraged and even paid by foreign governments eager to use the data for their own tax evasion investigations.
If you questions about FATCA, FBARs or tax evasion or have an unreported foreign account, give us a call. We will gladly help you explore your options. Our tax lawyers have also helped many taxpayers with a wide variety of criminal tax problems.
Mahany & Ertl – America’s Tax Lawyers. Offices in Milwaukee, Wisconsin; Detroit, Michigan; Portland, Maine; Minneapolis, Minnesota and San Francisco, California. IRS tax services available worldwide.
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Post by Brian Mahany, Esq