Blows Dealt to Department of Justice in Offshore Bank Account Enforcement

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Blows Dealt to Department of Justice in Offshore Bank Account Enforcement

The big news last week was that the Department of Justice lost two high-profiled trials involving offshore bank accounts.

The first was a jury verdict of “not guilty” in the Raoul Weil case, which began on October 14, 2014, in Fort Laurderdale, Florida.  The jury did not take long in its deliberations.  As explained in my prior post, Weil, a Swiss citizen, was the chief executive of UBS AG wealth management. He was indicted for conspiracy to commit tax evasion in 2008, but he disputed the charges and was declared a fugitive shortly after being charged.   In October of 2013 he was arrested while on vacation in Italy, and then extradicted in December of that year.

Weil is the first of the UBS bankers to go to jury trial.  Others have entered plea agreements or cooperated with the government.  However, given the now 100% loss record the DOJ now has in the only case it has brought against UBS bankers, one wonders if others regret taking the DOJ’s deals.

The other high-profile acquittal was of a banker for Mizrahi Tefahot Bank Ltd.  According to coverage in Bloomberg, Shokrollah Baravarian was also charged with conspiring to defraud the government.  However, the jury apparently believed Baravarian’s defense that his clients acted on their own in not paying taxes.

These trial losses officially bring the conviction rate in offshore bank account cases well-below those in other tax cases, and the government was having difficulty getting within guidelines-range sentences on those who were found or who pleaded guilty.

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