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USA: Catalogue of offshore prosecutions strikes fear into US taxpayers

11 April 2014   (0 Comments)
Posted by: Author: STEP
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Author: STEP

The US Justice Department's (USDoJ) tax division has in the past five years publicly charged 74 US taxpayers with offshore banking offences, it has announced. 

Of the accused, 61 have pleaded guilty, seven were convicted at trial and five are still awaiting trial or at large. The most celebrated is the property investor Victor Lipukhin, accused of maintaining secret UBS bank accounts worth more than USD10 million in the name of sham Bahamas entities. Lipukhin is a Russian citizen and resident, and is not even a US taxpayer. 

In the same period, 38 bankers and advisors have been charged with related offences. Six of these have pleaded guilty, most recently the former Credit Suisse banker Andreas Bachmann. Others are awaiting trial, including former Senior UBS Official Raoul Weil, who last December agreed to be extradited to the US, where he plans to defend himself. Several others are still evading the USDoJ's clutches – technically classed as fugitives from American justice. 

The Justice Department also recited its success last year in obtaining 'John Doe' court orders against several US banks that held correspondent bank accounts for various foreign banks. These orders, it says, will allow it to identify US taxpayers with bank accounts in Switzerland, the Cayman Islands, Guernsey, the Bahamas, Barbados, Hong Kong, Malta and the UK. 

The USDoJ announcement, which is clearly designed to influence US persons preparing to file their returns before the 15 April deadline, also lists its successes against the promotion and use of 'abusive tax shelters'. It draws special attention to last December's Supreme Court ruling in the Woods cases, in which it was held that a 40 per cent penalty applies when a taxpayer engages in an abusive tax shelter scheme that lacks economic substance.

This article first appeared on


Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.


The Act requires that a minimum academic and practical requirments be set to register with a controlling body. Click here for the minimum requirements of SAIT.

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