The U.S. government crackdown on offshore bank accounts used for tax evasion is continuing to make the news. A banker for a Swiss cantonal bank recently pled guilty to advising an American client on how to hide a bank account at a regional canton bank in Switzerland.
Orange County tax attorneys have noticed that this case is the first in which the U.S. prosecutors have charged a banker with helping Americans hide money in a Swiss canton bank. The cantonal banks are regional Swiss banks controlled by the Swiss government. The cantonal banks make up thirty percent of all Swiss banking activity.
The banker's name is Renzo Gadola. At one time he was employed as a banker for UBS AG, the Swiss banking giant that avoided U.S. prosecution by handing over names of American account holders suspected of tax evasion. Gadola became an independent investment adviser in 2009. In late 2010 he was in Florida encouraging an American client to hide a Swiss bank account from the IRS. The account was held at Basler Kantonalbank.
Gadola is said to be cooperating with the U.S. government. That cooperation could help the IRS and the Justice Department understand the activities of Swiss cantonal banks. Gadola was charged with, and pled guilty to, one count of conspiring to defraud the United States.
A person close to the investigation said U.S. authorities believe that vast sums of undisclosed U.S. assets remain in Switzerland, even after the U.S. government's ground-breaking pursuit of UBS for helping U.S. clients hide assets.
Authorities are now seeing undisclosed U.S. assets being transferred from larger Swiss institutions like UBS to the cantonal banks, this person said.
The charges said that Gadola and another former UBS banker advised Americans to close undeclared UBS accounts and open new accounts with Basler Kantonalbank. Prosecutors also said that Gadola worked with hundreds of undeclared accounts when he was with UBS. UBS had no comment on the Gadola case.
Because cantonal banks do not do business in the United States, many American tax evaders feel they are safe places to hide money. The Gadola prosecution is probably meant to be a warning to these account holders that the U.S. government will pursue them.
Source: Wall Street Journal "Swiss Banker Pleads Guilty in U.S. Tax Case" 12/23/2010