It is an old story with a new name—Swiss Life admits to helping Americans hide offshore assets and will pay a fine as a result.
Swiss Life is one of the largest financial and insurance agencies in Europe as well as the biggest life insurance company in Switzerland. It maintains entities in Liechtenstein, Singapore, and Luxembourg, as well as Zurich.
Criminal tax investigations by the Department of Justice (DOJ) and the Internal Revenue Service (IRS) have been ongoing for years as fallout after allegations aimed at UBS, the Swiss bank, in 2009. At the time, UBS assisted U.S. persons open and maintain foreign bank accounts in Switzerland. Maintaining assets in Switzerland helped American clients avoid reporting and paying tax to the U.S. Government.
Skirting U.S. regulatory requirements constitutes a tax crime and UBS ultimately paid $780 million for the tax fraud. The bank was allowed to enter into a deferred prosecution agreement, a disciplinary action that has become standard in big banking gone wrong.
As part of the settlement, UBS turned over data on thousands of clients they had been helping to hide their assets. Included in this were companies and agencies, like Swiss Life, that became collateral damage to the UBS deal.
In May, Swiss Life entered into its own deferred prosecution agreement for marketing products and services to Americans interested in escaping the long arm of the IRS. According to the DOJ, Swiss Life worked to hide $1.45 billion in offshore insurance policies for U.S. taxpayers. In addition to promising to play nice in the future and adhere to the deferral agreement, Swiss Life will pay about $77 million to the U.S. Treasury.
U.S. Attorney Audrey Strauss said “As they admit, Swiss Life and its subsidiaries sought out and offered their services to U.S. taxpayers to help them become U.S. tax evaders. The Swiss Life Entities offered private placement life insurance policies and related investment accounts to U.S. customers, and provided services that concealed the policies and other assets from the IRS. Indeed, the Swiss Life Entities saw U.S. authorities’ stepped-up offshore tax enforcement as an opportunity to pitch themselves to tax-evading U.S. customers as an alternative to Swiss banks.”
As with other deals of this type—compare $1.45 billion in filthy lucre to a $77 million fine. With so many European financial entities caught up in this type of tax investigation, Swiss Life is not likely to suffer a credibility problem for long. Pretty sweet deal.
Our tax attorneys can help if you are facing an allegation of criminal tax fraud
Experienced legal help is critical if you are contacted by the IRS or are involved in a tax controversy. With offices in Cleveland and Chicago, the legal team at Robert J. Fedor, Esq., LLC can help you today. Contact us or call 800-579-0997 for a free consultation.