UBS (the giant Swiss financial institution) has received a lot of bad press recently in connection with offshore tax evasion schemes. More UBS clients were indicted earlier this month, but federal authorities are focusing on other financial institutions as well. Lynnley Browning reported last week in the New York Times that arrests have now been made in connection with an international tax evasion scheme said to involve HSBC.
The latest case involves real estate developers who sold a hotel in New York City and allegedly routed the proceeds through sham accounts in Panama, the Virgin Islands, Liechtenstein, Switzerland and the Bahamas to evade taxes. The complaint against the real estate developers (filed in federal court in Fort Lauderdale, Florida) describes how federal agents used wire taps in 2007 to record various phone conversations. This shows that authorities are using more aggressive techniques in fighting offshore schemes.
I was setting up companies in Panama for clients more than thirty years ago. These entities, however, were used for very legitimate business, tax, and asset protection purposes. Using offshore companies or trusts to unlawfully evade U.S. taxes or for other unlawful purposes is becoming more and more difficult -- as it should be.