Bloomberg BNA Quotes Mark Matthews: U.S. Mining Swiss Bank Data to Find Tax Cheaters

Driven by fear of prison and scandal, tens of thousands of Americans who hid money offshore have taken an amnesty deal offered by the U.S. Internal Revenue Service since 2009.

They had to bring the money home, pay the taxes plus penalties, and tell authorities how bankers helped them cheat. In return, they weren't prosecuted. Some resisted, however. They moved their money from Switzerland to other tax havens such as Singapore and Hong Kong, daring the U.S. government to find them.

Now this high-stakes game of catch-me-if-you-can is heating up, thanks to an avalanche of data handed over by the 80 Swiss banks that made deals with the U.S. to avoid prosecution. As with the Americans, they've had to show how the cheating worked, although in deference to Swiss privacy laws they weren't required to name clients or provide account numbers. Prosecutors have been poring over the information and focusing on “leavers”—the clients who pulled their hidden money and stashed it elsewhere. They're also looking at companies and middlemen who helped them, say prosecutors and tax lawyers.

Mark E. Matthews, a lawyer at Caplin & Drysdale, says more of his clients are getting grand jury subpoenas for account records, adding that he thinks it's because of the trove handed over by the banks. “It's obvious that the Department of Justice is mining the data,” he says.

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Excerpt taken from the article “U.S. Mining Swiss Bank Data to Find Tax Cheaters” by David Voreacos and Christian Berthelsen for Bloomberg BNA.