Acting Assistant Attorney General Caroline D. Ciraolo Delivers Remarks at Pen and Pad Announcing First Resolution in Swiss Bank Program

I’d like to start by thanking Acting Associate Attorney General [Stuart] Delery for being here today and his unwavering support of the Tax Division and its offshore enforcement efforts.  I’d also like to thank Acting Deputy Attorney General Sally Quillian Yates and Attorney General Eric Holder for their guidance and leadership as the department seeks to bring an end to offshore evasion and to hold those responsible accountable for their criminal conduct.

On August 29, 2013, the Tax Division announced the Swiss Bank Program, under which Swiss banks that were not already under investigation could resolve their criminal liability.  The program was designed to encourage the participation of banks about which the department had little or no information, that operated beyond our borders, and that acknowledged having a role in the concealment of offshore accounts and the evasion of U.S. tax obligations.  All individuals were expressly excluded from the program.

The program offers a unique opportunity for Swiss banks to come forward voluntarily, admit to criminal conduct, pay an appropriate penalty, and assist the department in its investigations of other financial institutions, U.S. accountholders, and individuals who facilitated and profited from the concealment of foreign accounts by U.S. taxpayers.  Banks satisfying these strict requirements are eligible for a non-prosecution agreement (NPA).  As noted, today’s agreement is the first of many that will be signed in the near future.

Under the terms of the NPA, in addition to the information provided to date, BSI agrees to:

• continue to provide detailed information regarding closed accounts;

• continue to assist in treaty requests;

• assist in investigations and prosecutions arising out of or related to conduct set forth in the NPA;

• use its best efforts to secure attendance and truthful statements of BSI employees and officers at any meeting, interview or legal proceedings arising out of or related to conduct set forth in the NPA;

• provide assistance to any state law enforcement agencies to authenticate documents to be used in state civil or criminal tax proceedings against individuals arising out of or related to the conduct described in the NPA;

• close all recalcitrant accounts within two years of the NPA;

• demonstrate controls to prevent employees from assisting recalcitrant accountholders in further acts of concealment;

• ensure that all new accounts will be declared to the United States and subject to disclosure by BSI;

• use its best efforts within term of the NPA to close dormant accounts; and

• retain all records for 10 years from the termination date of the NPA.

Notwithstanding its four-year term, the NPA requires BSI to cooperate until all matters related to or arising from conduct are completed, and incorporates a tolling agreement as to any offenses that were not time-barred as of August 29, 2013.

The department, with the substantial assistance of IRS-Criminal Investigation and the Large Business & International Division, is using the information obtained in the program to initiate and pursue investigations of individuals and other financial institutions.  We are tracking the movement of funds in and out of these secret offshore accounts.  Our investigations go well beyond Switzerland and the department will continue to follow the evidence wherever it leads.  Anyone contemplating the use of secret offshore accounts should think twice – we intend to identify, investigate and vigorously prosecute those individuals and entities that seek to evade our nation’s tax laws, and assist others in doing so.  The lack of public disclosure of law enforcement actions in a particular jurisdiction should in no way be viewed as inaction on the part of our prosecutors.

It is important to note that an individual is not culpable simply because he or she is identified by a bank within the program.  With that said, the department strongly encourages those individuals and entities currently under investigation or who have engaged in criminal conduct to contact and fully cooperate with the department to reach a final resolution.

In addition to its investigative nature, the program has encouraged thousands of U.S. taxpayers to come into compliance through the IRS voluntary disclosure programs.  The IRS recently reported that more than 50,000 taxpayers have entered the programs, resulting in more than $7 billion to the U.S. Treasury.  Those who have not yet disclosed their offshore accounts may still be eligible for a voluntary disclosure, but their time is running out and with the announcement of each agreement reached under the program, the costs of such a disclosure are increasing.

Our efforts to combat offshore and domestic evasion are critical to the continued integrity of our national tax system, and serve to send a strong message to those individuals who make good faith efforts to comply with their tax obligations that we will hold accountable those who do not.

I join Acting Associate Attorney General Delery in thanking the Swiss government for its ongoing support of the program, and for expediting the processing of treaty requests.  We value and appreciate our relationship with the Swiss government and look forward to the continued move toward transparency and compliance.

I will conclude my remarks by thanking the men and women of the Tax Division, and their colleagues within the IRS, who have invested an extraordinary amount of time and effort to make the Swiss Bank Program a success.  Today is a tribute to their efforts and we are very grateful for their contributions.  In particular, I want to recognize Tax Division Trial Attorney Kevin Sweeney, who served as lead counsel on this matter, as well as Tom Sawyer, Senior Counsel for International Tax Matters and Coordinator of the Swiss Bank Program, Nanette Davis, Senior Litigation Counsel, and Trial Attorney Kimberle Dodd.