Jack Townsend has a good write-up of the latest guilty plea in the IRS’s pursuit of U.S. taxpayers with unreported Swiss accounts. This is one Dr. Silva, who did some Very Dumb Things. And now experiences the consequences. Go read Jack’s commentary.
The bank involved was HSBC, and the allegation is that bank employees colluded with the taxpayer and a Swiss lawyer to disguise the account and repatriate the money to the United States.
My opinion? This focus on the particular bank involved is misplaced. When there’s a bank robbery we don’t get all worked up about the fact that the robber drove away in a Chevy. Nor should we get all worked up about the fact that a U.S. citizen had money in $RANDOMBANK. What matters? The humans. And what they did.
The fact that HSBC was involved is useful only to the IRS in its attempt to flush wavering taxpayers out into the open where they can be promptly dispatched. Frankly, dear IRS, that ship has sailed.
The naming of a new bank (HSBC) is also useful to the IRS because (in theory) the U.S. government can attempt to bring the banhammer down on HSBC. How far the government gets with this is unknown, given the recent court decisions in Switzerland. My guess is that all of this will end up with a “Go and sin no more” arrangement. Going backwards in time to forcibly uncover U.S. customers of Swiss banks? At the moment this looks extremely difficult given domestic Swiss political considerations.
Dr. Silva’s activities in disguising ownership seem to be extremely plain vanilla: a Liechtenstein trust. Oh, FFS, Dr. Silva. You went shopping for financial advice at a cocktail party, didn’t you?
I put no great shakes in the way things were done here. The IRS didn’t find anything unusual. Tax evaders use Liechtensten trusts (and trusts elsewhere) all day every day, and so do normal people doing their estate planning.
The reason I think Dr. Silva ran into trouble? The structuring offense. Mailing cash to himself in little chunks.
Listen up, dear readers. The DoJ can make almost anything look like a money laundering offense. Don’t smuggle money back to the U.S., in big lumps or small. And “money” can mean many, many, many things. Don’t get clever.
If you’re in a Dr. Silva position, here’s my advice:
Jack Townsend quotes Ed Robbins in his blog post. Ed and I are on a panel next month talking about precisely this topic. I can’t wait.
March 16, 2010. Los Angeles County Bar Association and Loyola Law School. More info later.