In a case of long-arm jurisdictional reach criticized by both European government officials and foreign financial industry leaders, a former Swiss banking executive was arrested in 2013 on a U.S. fugitive warrant while vacationing in Italy. The charges of conspiring to defraud the U.S. government because of allegedly handling offshore banking business for U.S. clients could have resulted in both jail time and a hefty fine. However, in a blow to prosecutors, a federal jury in Florida acquitted the defendant.
Headed Global Wealth Management
The defendant was formerly the No. 3 executive at Switzerlands largest bank and at the time of his trial, was the highest ranking Swiss banker to be prosecuted under an IRS and Justice Department crackdown on U.S. taxpayers use of offshore accounts to evade U.S. taxes. Prosecutors alleged that between 2002 and 2008, the executive conspired with wealthy Americans to hide $20 billion from the Internal Revenue Service by way of secret overseas bank accounts, and that he did all he could to promote and protect a profit-making business albeit one that was illegal for U.S. taxpayers to patronize. In fact, according to prosecutors: Its a simple story of greed and making money. Its simple, straightforward, offshore tax evasion. He was participating in it. He was involved, stated U.S. prosecutor Jason Poole in his closing argument to the jury.
Jury Saw It Differently
After deliberating for little over an hour, the jury returned the not guilty verdict. The defense had argued two main points: That any tax evasion that occurred was the conduct of U.S. taxpayers, and that any assistance they may have had from the bank was provided by lower-level employees who acted without the defendants knowledge: Whose obligation was it to pay the taxes? The taxpayers, argued defense attorney Matthew Menchel. He also slammed the governments witnesses many of whom were former employees of the bank as being unreliable because they were given immunity from prosecution: Who are the criminals here? Who are the ones that should be punished instead of getting sweetheart deals? It had nothing to do with [the defendant] or anybody above him.
Thousands of Americans Named
In 2009, the Swiss bank involved paid a $780 million fine to U.S. authorities and also disclosed the names of thousands of American account holders to the IRS apparently in a bid to avoid criminal prosecution. Overall, it is reported that 17,000 Americans had accounts at the bank where they allegedly stashed money to avoid paying U.S. taxes. Many of them were subsequently prosecuted.
Peyman Khosravani is a global blockchain and digital transformation expert with a passion for marketing, futuristic ideas, analytics insights, startup businesses, and effective communications. He has extensive experience in blockchain and DeFi projects and is committed to using technology to bring justice and fairness to society and promote freedom. Peyman has worked with international organizations to improve digital transformation strategies and data-gathering strategies that help identify customer touchpoints and sources of data that tell the story of what is happening. With his expertise in blockchain, digital transformation, marketing, analytics insights, startup businesses, and effective communications, Peyman is dedicated to helping businesses succeed in the digital age. He believes that technology can be used as a tool for positive change in the world.
