More tax cases vs wealthy, U.S. banks

CHICAGO (Reuters) - The U.S. government is stepping up prosecutions of wealthy individuals dodging taxes through off-shore accounts, with new cases expected to be made public "every couple of weeks," a top government attorney said on Saturday.

U.S. officials have been sifting through about 250 client names obtained through a February settlement of a criminal probe against Swiss banking giant UBS AG, alleging the bank illegally helped U.S. taxpayers hide funds offshore.

That effort, along with an amnesty program encouraging tax evaders to turn themselves in, is speeding prosecutions, one of the top U.S. lawyers working on the cases at the U.S. Justice Department said.

"You can expect a few every couple of weeks," Kevin Downing, a senior attorney in the tax division of the Department of Justice told an American Bar Association tax conference.

On the sidelines of the conference, Downing also told Reuters that U.S. banks that helped U.S. clients hide money off-shore are a target.

"The folks in the United States that we get information on are obviously the easiest ones for us to pursue," he said.

"So anybody in the U.S. ... the U.S. banks helping U.S. clients set these offshore accounts up, we are doing the same thing," in going after them, he said.

In August, UBS AG agreed to disclose the names of 4,450 American holders of secret accounts at the bank, ending a related lawsuit that has begun to show cracks in Switzerland's prized banking secrecy.

"The UBS case has been a great success for the government," Downing said. "It is not an anomaly. It is the beginning of what is now a resource-intensive," process of going after other banks and countries.

The government has secured six guilty pleas so far in its effort, including one on Friday, where a New Jersey man pleaded guilty for failing to report about $6.1 million he had held in a UBS AG Swiss bank account.

On a parallel track to the UBS case, the government last Monday extended a temporary amnesty program by three weeks to October 15, to encourage wealthy Americans with undeclared assets abroad to come forward.

Those taking part in the amnesty program pay reduced penalties and generally avoid criminal prosecution.

Downing also said the government has "made a lot of headway" in dealing with foreign banks, Downing said. "Let your clients know if they think it's just UBS they are mistaken," he told the group of tax lawyers.


The UBS case and its ramifications dominated many discussions and spiced up what would arguably be a dry conference on taxation.

One moderator began his presentation, noting "this is not going to be about UBS," though often the subject crept back in.

Another government lawyer working on the cases said the publicity of the UBS cases has engaged juries.

"In today's environment when we are seeing criminal tax cases and prosecutions on the front pages of the newspapers almost daily ... the message is getting out," Jeff Neiman, an assistant U.S. attorney for the Southern District of Florida where much of the UBS cases are playing out, said.

Juries are paying attention and becoming more sympathetic, he said, "especially in these tough economic times."

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