Andreas Bachmann, a former Credit Suisse banker, was spared prison and instead received probation after cooperating with the IRS and U.S. Department of Justice. Bachmann was sentenced this month after pleading guilty to conspiracy to defraud the IRS. Prosecutors say he helped wealthy Americans evade U.S. taxes by hiding money in offshore accounts.
Owning a foreign account is entirely legal as long as it is properly reported to the IRS. Using an account to hide money from the government or evade taxes is a felony, however. Foreign accounts with an aggregate value of $10,000 or more must be reported on both Schedule B of the individual income tax return and on an FBAR (Report of Foreign Bank and Financial Accounts.) Failure to file an FBAR is a felony.
Bachmann’s cooperation appeared to be a major factor in his reduced sentence. The information he provided helped the Justice Department collect a $2.6 billion fine from Credit Suisse.
Several more Swiss banks are under criminal investigation. As we have seen recently, the Justice Department routinely targets bankers in order to gain information about the banks they work for as well as their client lists.
Bachmann’s indictment and sentencing have widespread implications for both would be whistleblowers and taxpayer with unfiled FBAR forms.
For taxpayers with unreported accounts, the message is clear. Notwithstanding promises of bank secrecy and confidentiality, bankers will “squeal like pigs” when indicted. Cooperation often means the difference between prison and probation. Time after time we have watched bankers roll over on both their employers and former clients. If you have an unreported account or unfiled FBARs, don’t expect to remain under the radar for long.
Our advice? Find a good FBAR lawyer. An experienced tax professional can help with amnesty and streamlined filing options. In most instances, a good lawyer can help eliminate or reduce the otherwise severe penalties associated with unreported offshore accounts.
For would-be whistleblowers, cooperation after the fact may earn you a get-out-of-jail card but won’t earn you a whistleblower award. Former UBS banker Bradley Birkenfeld received a $104,000,000 whistleblower award for information about his former employer, Swiss bank UBS. Like Credit Suisse, UBS was helping Americans hide money and avoid FBAR filings. Unlike Birkenfeld, however, Bachmann didn’t get an award. Bachmann cooperated after his indictment.
Whether you are a banker that helped Americans hide money, one of those Americans with unfiled FBAR forms or a would be whistleblower, the message here is clear. Doing nothing is probably the worst choice one can make. The IRS has become quite adept at finding people with hidden accounts and those who helped hide them.
Have an unreported foreign account? Contact attorney Bethany Canfield today at or by telephone at (414) 223-0464. Bankers with information or potential problems? Contact attorney Brian Mahany at or by telephone at (414) 704-6731 (direct). All inquiries protected by the attorney – client privilege and kept completely confidential.