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January 7, 2016
DOJ Announces Second Largest Penalty Under Swiss Bank Program
by William R. Davis and Tom Kasprzak

Full Text Published by Tax Analysts®

Union Bancaire Privée (UBP) reached a resolution under the Justice Department's Swiss bank program and will pay a penalty of more than $187 million, the second largest penalty for category 2 banks in the program's history, the DOJ announced January 6.

"Today's agreement marks the final resolution with UBP, which acknowledges its role in conspiring with U.S. taxpayers to evade U.S. tax through an array of sham entities, structured transactions, nominees, and bank services designed to disguise the true ownership of foreign accounts and other assets," said Caroline Ciraolo, acting assistant attorney general of the DOJ Tax Division.

The non-prosecution agreement marks the 76th category 2 agreement and brings the total penalties collected to just over $1.3 billion. Previously, Ciraolo had indicated that all resolutions under the program would be completed by December 31, 2015. But she told Tax Analysts that there are more pending NPAs and that this announcement brings the Justice Department "one step closer to completing those pending agreements."

The terms of the agreement require UBP to cooperate in any related criminal or civil proceedings and demonstrate its implementation of controls to stop misconduct involving undeclared U.S. accounts.

UBP managed approximately 2,919 U.S.-related accounts during the period subject to penalty, a figure that includes both declared and undeclared accounts. The bank's peak assets under management reached $4.9 billion during the years in question.

"Today's agreement is significant on several fronts," Richard Weber, IRS Criminal Investigation division chief, said in the press release. "This agreement will have far-reaching implications, expanding our understanding about the depth, breadth, tactics, and techniques employed by the UBP private bankers and external asset managers who assisted U.S. taxpayers to conceal assets not only in Switzerland, but in other jurisdictions as well."

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