Government seeks concession on money laundering

In response to international pressure, the government has asked parliament to approve a proposal to further dilute banking secrecy, allowing the Swiss Money Laundering Reporting Office (MROS) to pass on banking data to its partners abroad.

Switzerland was facing suspension from the Egmont Group (Keystone)

The Swiss reporting office is a member of the Egmont Group, an international association of “Financial Intelligence Units”, which since July last year has been threatening to suspend Switzerland.

The MROS, part of the Federal Police Office, is the only member of the 127-strong group that has refused to transmit financial information to fellow authorities.

The intergovernmental Financial Action Task Force, the central global organisation in the fight against money laundering and the financing of terrorism, has also hardened its tone on the issue, calling for reporting offices to be obliged to exchange all the information at their disposal.

The revision of the law proposed by the government would allow MROS to hand over concrete financial information to its foreign partners, including bank account numbers, transaction details and account balances – information currently protected by banking secrecy.

The goal is to boost the fight against money laundering and the financing of terrorism while reinforcing the integrity of the Swiss financial system, the government said.

The proposal is in the interests of the country because Switzerland would also receive information from other reporting offices, some of which are currently not giving any financial information to Switzerland, it added.

Suspicious
 
According to the Money Laundering Act, MROS is responsible for receiving and analysing suspicious activity reports in connection with money laundering and, if necessary, forwarding them to the law enforcement agencies.

The number of reports on suspicious money transactions in Switzerland received by the reporting office increased by some 40 per cent last year following the Arab Spring uprisings, MROS said in May.

Part of the reason for the increase was a new requirement for Swiss banks and other financial institutions to report shady deals surrounding foreign political events.

The total number of suspicious activity reports presented to the MROS increased from 1,159 in 2010 to 1,625 last year. The sums of money involved in 2011 were higher than in the previous two years combined. Two-thirds of reports came from banks.

swissinfo.ch and agencies

Overseas Banks Threaten to Close Accounts

Foreign banks are sending letters to U.S. residents who have accounts, requiring that these customers waive secrecy rights and pressuring them to report on the accounts to the IRS.

The banks, feeling the heat of a new law that punishes them for shielding U.S. customers, also are seeking waivers that will take them off the legal hook if something goes wrong in the future with a U.S. customer's account.

The letters typically include various documents to be signed, along with a threat to close the account if the customer doesn't comply, according to tax advisers. They say they are hearing about the letters from account holders at banks around the globe, including Switzerland, Israel and countries in Asia.

Swiss bank BSI SA, based in Zurich, for example, has sent a form authorizing account closure if needed and releasing the bank from "any and all liabilities for all the transactions that you have executed," according to a copy of the letter shown to Dow Jones Newswires. Included with the letter was an IRS Form W9, on which the customer must list their U.S. taxpayer identification number, and a form titled Declaration of U.S. Person that gives the bank authority to report information to the IRS and waives the customer's rights under Swiss bank secrecy law.

The bank didn't return a request for comment.

The letters signal a widening, and increasingly aggressive, campaign by international banks to protect themselves from U.S. official action even at the cost of losing U.S. customers. Since 2009, the IRS and U.S. Justice Department have been cracking down on offshore tax evasion, focusing first and most intently on UBS AG (UBS, UBSN.VX) and then extending to other Swiss banks and elsewhere.

Passed in 2010, the Foreign Account Tax Compliance Act, or Fatca, was designed to get more offshore assets onto the IRS's radar. Several of the law's provisions start to take effect this year and will require both U.S. citizens and foreigners living in the U.S. to report more about their overseas holdings on their tax returns.

Anyone who gets a Fatca-related letter from a bank and refuses to sign it faces a dilemma once the account is closed, says Scott D. Michel, a partner at the Washington office of law firm Caplin & Drysdale. "They have to find something to do with the money," he says, "which in this increasingly compliance-oriented global financial system usually means that one way or the other the account will come to the attention of the U.S. government."

Not everyone who has an overseas account is trying to hide assets from the IRS. Financial advisers say that, in general, clients with international connections--parents or children living overseas, for example--are worried about tripping over IRS reporting rules.

Jim Holtzman, a financial planner and certified public accountant at Legend Financial Advisors in Pittsburgh, says his clients are "jumpy" about what to do with foreign accounts.

Financial advisers and accountants have dreaded Fatca in large part because it means more, and sometimes duplicative, reporting. A taxpayer with more than $10,000 in an offshore account, for example, already must file a Report of Foreign Bank and Financial Accounts with the IRS. Now, anyone with at least $50,000 in a foreign account will have to report it separately on another form to the IRS.

Advisers who learn a client has money stashed overseas can help the person think through whether it is worthwhile to enter a special amnesty program the tax agency runs. Penalties are capped and criminal charges won't apply.

Uganda: Locals Hiding 400 Billion Shillings in Swiss Banks

Wealthy Ugandans have close to sh400b stashed away in secret Swiss bank accounts, according to a report released by the Swiss National Bank (SNB) - Switzerland's central bank.

The report places Uganda among top African countries that have millions of dollars in Swiss banks.

The total amount in Switzerland's banks stood at 1.53 trillion Swiss francs at the end of 2011, which included 154m Swiss francs (sh400b) belonging to Ugandan individuals and entities.

New Vision could not establish details of the account holders. One American dollar is equivalent to 1.049 Swiss Francs.

1.53 trillion Swiss francs at the end of 2011, which included 154m Swiss francs (sh400b) belonging to Ugandan individuals and entities. New Vision could not establish details of the account holders.

One American dollar is equivalent to 1.049 Swiss Francs.

The official figures, described by SNB as 'liabilities' of Swiss banks towards their clients from various countries, do not show the total amount of the much-debated alleged 'black money' held by Africans or other nationals in the safe havens of Switzerland.

The Swiss banks' direct liabilities towards clients from Uganda include funds held in savings and deposit accounts and assets of Ugandan individuals and corporates.

Deputy Inspector General of Government Raphael Baku yesterday said Uganda is yet to enact the Anti-Money Laundering law which would deal with transfer of ill-gotten wealth abroad.

"The problem is that we don't have an enabling law on funds illegally transferred outside the country. In the absence of the law, the banks have no obligation to report to us about the transfers," he explained.

Seychelles (sh6.6 trillion), Kenya (sh2.1 trillion), South Africa (sh2.09 trillion) and Egypt (sh2.08trillion) are the top African countries whose nationals have stashed away millions of dollars in Swiss bank accounts, according to the report.

Swiss banks are a leading destination for people, mostly criminals and dictators because of the strict security and banking secrecy policies.

Switzerland last year found 360m Swiss francs ($415.8 million) of potentially illegal assets linked to slain Libyan leader Muammar Gadaffi and his circle stashed in the Alpine country.

Some 410m Swiss francs was also traced to former Egyptian President Hosni Mubarak and 60m Swiss francs linked to former Tunisian President Zine al-Abidine Ben Ali. Swiss authorities also last year froze assets belonging to Ivory Coast's deposed President Laurent Gbagbo.

There has been global pressure for Switzerland to ask its banks to share information about their clients with foreign governments.

The UK has the largest share of money stashed in Swiss accounts, followed closely by the US according to the data.

The UK and the US are followed by West Indies, Jersey, Germany, Bahamas, Luxembourg, Panama France, Hong Kong, Cayman Islands, Japan, Singapore, Australia, Italy, Netherlands, Russia, Saudi Arabia and United Arab of Emirates.

Liechtenstein Informs Bank Clients of U.S. Tax-Evasion Request

Liechtenstein, an Alpine country of 36,000 people, has told American clients of the principality’s oldest bank that U.S. authorities have requested their account data as they widen a tax-evasion probe.

Accounts at Liechtensteinische Landesbank AG (LLB) that contained at least $500,000 at any time since the beginning of 2004 are covered by the information request, according to a May 30 letter sent to a client by the principality’s tax authority. Liechtenstein facilitated the so-called group request from the U.S. by amending a tax law in March.

Enlarge image

Liechtensteinische Landesbank AG headquarters in Vaduz, Liechtenstein. Photographer: Adrian Moser/Bloomberg

Enlarge image

The headquarters of Liechtensteinische Landesbank AG, foreground, stand below Vaduz Castle in Vaduz, Liechtenstein. Swiss banks are seeking a settlement with the U.S. as Liechtenstein’s larger Alpine neighbor, the world’s biggest center for offshore wealth, tries to shed its image as a haven for undeclared assets.

Liechtenstein’s second-biggest bank, also known as LLB, is one of 11 financial firms, including Credit Suisse Group AG (CSGN) and Julius Baer Group Ltd. (BAER), being investigated as part of a U.S. probe of offshore tax evasion. The stakes for Swiss banks were raised after the Department of Justice indicted Wegelin & Co. on Feb. 2 for allegedly helping customers hide money from the Internal Revenue Service.

“The motivation for the law is the Landesbank issue, which has accelerated the process,” said Mario Frick, a partner at Liechtenstein law firm Seeger, Frick & Partner. “For a certain period of time, it will be possible to make group requests to clean up the past and the issue of legacy assets.”

Landesbank, which had 48.1 billion Swiss francs ($50 billion) of assets under management at the end of 2011, confirmed it has received a group request via the Liechtenstein authorities, Cyrill Sele, a spokesman for the bank in Vaduz, said in an e-mailed response to questions.

Third Parties

“The ruling to extend the period of applicability back to the tax year 2001 in the administrative assistance law with the U.S. is limited to 12 months from the date it comes into force,” said Sele. It “is closely linked to the ongoing U.S. offshore voluntary disclosure program.”

Those affected by the U.S. request for information have the right to appeal, according to the letter.
In the Liechtenstein group request, U.S. authorities are also targeting lawyers, accountants, financial advisers, asset managers and those responsible for professional “asset protection,” who “conspired with a U.S. taxpayer to commit U.S. crimes or provided assistance,” according to the letter.

“It’s a sign that the U.S. is not just focused on Switzerland, but on all offshore jurisdictions with Singapore, Dubai and Hong Kong very much on the radar screen,” said Milan Patel, a partner at Zurich-based law firm Anaford AG. “This request appears to be much more expansive than the agreement with Switzerland and aims to get information on third parties.”

UBS Precedent

Swiss banks are seeking a settlement with the U.S. as Liechtenstein’s larger Alpine neighbor, the world’s biggest center for offshore wealth, tries to shed its image as a haven for undeclared assets. That may involve negotiating separate deferred prosecution agreements with U.S. authorities.

UBS AG, the biggest Swiss bank, avoided prosecution in 2009 by paying $780 million, admitting it fostered tax evasion and giving the IRS data on more than 250 accounts. It later turned over data on another 4,450 accounts. Before the UBS deferred- prosecution deal, U.S. prosecutors said the bank managed $20 billion in undeclared assets for American clients.

Landesbank declined to comment on whether the handover of account data under the group request would allow the bank to enter a deferred prosecution agreement.

Christof Buri, a spokesman for larger Liechtenstein rival LGT Group, which had 86.9 billion francs of assets under management at the end of last year, said the bank only has tax- compliant U.S. clients. The bank, owned by Liechtenstein’s princely family, declined to comment further.

Unwinding Secrecy

Liechtenstein started to unwind secrecy after data stolen from LGT was used by Germany to prosecute tax evaders in 2008. Former Deutsche Post AG (DPW) Chief Executive Officer Klaus Zumwinkel was convicted of tax evasion and received a two-year suspended prison sentence plus a penalty of 1 million euros ($1.25 million).

Under pressure from the U.S., Germany and France, Liechtenstein said in March 2009 that it would conform with tax standards set out by the Organization for Economic Cooperation and Development to avoid being blacklisted as a tax haven.

Markus Amman, a spokesman for the Liechtenstein government, and Katja Gey, who helped negotiate a tax deal for the principality with the U.K., didn’t answer calls to their mobile phones.

“It’s only a question of time, say three to five years, when this type of group request will become standard for future business,” said lawyer Frick. “Liechtenstein is a small country that has had a reputation for not cooperating in the field of tax and that’s something that has to change. We have to find new areas of business.”

To contact the reporter on this story: Dylan Griffiths in Geneva at dgriffiths1@bloomberg.net
To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net

U.S. prosecutor in Swiss tax probe to exit

(Reuters) - The U.S. prosecutor most responsible for piercing the veil of Swiss bank secrecy has resigned, but tax experts said his exit was unlikely to slow Justice Department efforts to rein in American offshore tax evasion there.

Kevin Downing, 46, who for several years has led the department's criminal probe of the Swiss banking industry, will leave effective June 4 to become a partner at a major law firm, a source familiar with the matter said on Thursday.

The source would not identify the law firm, but tax lawyers said Downing, with 15 years at the Justice Department, has had offers from several major law firms over the years.

Scott Michel, a tax lawyer at Caplin Drysdale in Washington, D.C., called Downing "one of the most important and impactful tax prosecutors in the country in the last 15 years." Michel credited Downing, along with other Tax Division lawyers and special agents from the IRS's Criminal Investigation Unit, as having almost single-handedly penetrated "the decades-old wall of Swiss bank secrecy."

Scrutiny of Swiss banks by the Justice Department and the Internal Revenue Service has intensified. Eleven banks, including Credit Suisse AG, are under criminal investigation. Dozens of Swiss private bankers and their American clients have been indicted in recent years.

Peter Hardy, a former federal prosecutor who is now at Post & Schell, a law firm in Philadelphia, said that while Downing's departure "might seem to take some of the air out of the offshore evasion campaign, it's far enough along at this point that it has a life of its own. It's his legacy."

NEGOTIATIONS STALL

Negotiations with Swiss officials appear to have stalled in recent months over whether some of the 11 Swiss banks should be forced into deferred-prosecution agreements. Swiss officials want a global, civil settlement for the more than 300 banks in the Swiss banking sector, with no more criminal dispositions.

Mario Tuor, a spokesman of the State Secretariat for International Financial Matters in Zurich, declined to comment on Downing's departure.

Tax lawyers and sources briefed on the matter said Downing's departure for the more lucrative private sector was not prompted by any dissatisfaction with the pace of the negotiations.

Downing's functional replacement is expected to be Mark Daly, a trial attorney for the Northern Criminal Enforcement Section of the Justice Department's tax division, government sources said. Daly has played a growing, behind-the-scenes role in the scrutiny of Swiss banks, the sources said. Daly did not return calls requesting comment.

Eileen O'Connor, head of the Justice Department's tax division from 2001-2007, described Downing as "dynamite but more vigorous than some defense attorneys were comfortable with". O'Connor, now in private practice at Pillsbury Winthrop Shaw Pittman in Washington, D.C., promoted Downing to his current job of senior litigation counsel.

UBS CASE

Stephen Kohn, executive director of the National Whistleblower Center, said Downing was "hostile toward whistleblowers" and considered his client, former UBS AG private banker Bradley Birkenfeld, "merely a tipster" ra t her than a key to unlocking the case against UBS.

Birkenfeld provided information about the bank's dealings with tax-evading clients and exposing what Downing later called in court papers a "massive tax fraud scheme" at the bank.

In 2005, under Downing's direction, UBS entered into a deferred-prosecution agreement and paid a $780 million fine for tax-evasion services sold through its private bank to wealthy Americans. In January 2010, Birkenfeld began serving a 40-month prison term in Pennsylvania for admitting to conspiracy in helping a former wealthy client, California property billionaire Igor Olenicoff, conceal large sums at UBS.

Downing joined the Justice Department in 1997, and first made his name by leading the investigation of banks, accounting firms and law firms that sold bogus tax shelters to retail investors. Under his direction, that probe culminated in a deferred-prosecution agreement with KPMG, a Big Four accounting firm, in 2005.

KPMG averted indictment by admitting to criminal wrongdoing and paying a $456 million fine. Last February, also under Downing's supervision, Wegelin & Co, Switzerland's oldest private bank, was charged with enabling wealthy Americans to evade taxes on at least $1.2 billion hidden in offshore bank accounts.  

(Reporting by Lynnley Browning; additional reporting by Andrew Thompson in Zurich)

Wegelin & Co., Swiss Bank, Denies Claims It Helped Americans Evade $1.2 Billion In Taxes

NEW YORK, May 23 (Reuters) - Wegelin & Co, the oldest Swiss private bank, is digging in its heels against a U.S. criminal charge that it conspired to help wealthy Americans evade taxes.
At a hearing in U.S. District Court in Manhattan on Wednesday, a federal prosecutor said Swiss police on May 2 had hand delivered a court summons and a copy of the indictment to Wegelin executive Konrad Hummler.

The bank is now seeking to contest the summons in Swiss courts, prosecutor Daniel Levy said.

The indictment of Wegelin, which was founded in 1741, was the first in which the United States accused a foreign bank, rather than individuals, of helping Americans commit tax fraud.

Wegelin was accused of helping clients hide more than $1.2 billion in offshore bank accounts. The case is part of a U.S. crackdown on alleged tax fraud, including efforts to pierce the tradition of Swiss bank secrecy.

Wegelin was not in court on Wednesday, nor did it appear at the first hearing in the case in February.

A spokeswoman for Wegelin could not immediately be reached for comment.

At Wednesday's hearing, Judge Jed Rakoff conceded that it is "rather hard to arrest a corporation" but asked why U.S. prosecutors had not sought a warrant to arrest individual Wegelin partners.

There is "some reason to believe the Swiss authorities would not execute the warrant," Levy responded, but said he would continue to consider that as a possible option. No Wegelin partner has been charged, Levy said.

The case is U.S. v. Wegelin & Co et al, U.S. District Court, Southern District of New York, No. 12-cr-00002. (Reporting By Basil Katz; Editing by Phil Berlowitz)

Liechtenstein Informs Bank Clients of U.S. Tax-Evasion Request

The headquarters of Liechtensteinische Landesbank AG, foreground, stand below Vaduz Castle in Vaduz, Liechtenstein. Swiss banks are seeking a settlement with the U.S. as Liechtenstein’s larger Alpine neighbor, the world’s biggest center for offshore wealth, tries to shed its image as a haven for undeclared assets. Photographer: Adrian Moser/Bloomberg

Liechtenstein, an Alpine country of 36,000 people, has told American clients of the principality’s oldest bank that U.S. authorities have requested their account data as they widen a tax-evasion probe.

Accounts at Liechtensteinische Landesbank AG (LLB) that contained at least $500,000 at any time since the beginning of 2004 are covered by the information request, according to a May 30 letter sent to a client by the principality’s tax authority. Liechtenstein facilitated the so-called group request from the U.S. by amending a tax law in March.

Liechtenstein’s second-biggest bank, also known as LLB, is one of 11 financial firms, including Credit Suisse Group AG (CSGN) and Julius Baer Group Ltd. (BAER), being investigated as part of a U.S. probe of offshore tax evasion. The stakes for Swiss banks were raised after the Department of Justice indicted Wegelin & Co. on Feb. 2 for allegedly helping customers hide money from the Internal Revenue Service.

“The motivation for the law is the Landesbank issue, which has accelerated the process,” said Mario Frick, a partner at Liechtenstein law firm Seeger, Frick & Partner. “For a certain period of time, it will be possible to make group requests to clean up the past and the issue of legacy assets.”

Landesbank, which had 48.1 billion Swiss francs ($50 billion) of assets under management at the end of 2011, confirmed it has received a group request via the Liechtenstein authorities, Cyrill Sele, a spokesman for the bank in Vaduz, said in an e-mailed response to questions.

Third Parties

“The ruling to extend the period of applicability back to the tax year 2001 in the administrative assistance law with the U.S. is limited to 12 months from the date it comes into force,” said Sele. It “is closely linked to the ongoing U.S. offshore voluntary disclosure program.”

Those affected by the U.S. request for information have the right to appeal, according to the letter.
In the Liechtenstein group request, U.S. authorities are also targeting lawyers, accountants, financial advisers, asset managers and those responsible for professional “asset protection,” who “conspired with a U.S. taxpayer to commit U.S. crimes or provided assistance,” according to the letter.

“It’s a sign that the U.S. is not just focused on Switzerland, but on all offshore jurisdictions with Singapore, Dubai and Hong Kong very much on the radar screen,” said Milan Patel, a partner at Zurich-based law firm Anaford AG. “This request appears to be much more expansive than the agreement with Switzerland and aims to get information on third parties.”

UBS Precedent

Swiss banks are seeking a settlement with the U.S. as Liechtenstein’s larger Alpine neighbor, the world’s biggest center for offshore wealth, tries to shed its image as a haven for undeclared assets. That may involve negotiating separate deferred prosecution agreements with U.S. authorities.

UBS AG, the biggest Swiss bank, avoided prosecution in 2009 by paying $780 million, admitting it fostered tax evasion and giving the IRS data on more than 250 accounts. It later turned over data on another 4,450 accounts. Before the UBS deferred- prosecution deal, U.S. prosecutors said the bank managed $20 billion in undeclared assets for American clients.

Landesbank declined to comment on whether the handover of account data under the group request would allow the bank to enter a deferred prosecution agreement.

Christof Buri, a spokesman for larger Liechtenstein rival LGT Group, which had 86.9 billion francs of assets under management at the end of last year, said the bank only has tax- compliant U.S. clients. The bank, owned by Liechtenstein’s princely family, declined to comment further.

Unwinding Secrecy

Liechtenstein started to unwind secrecy after data stolen from LGT was used by Germany to prosecute tax evaders in 2008. Former Deutsche Post AG (DPW) Chief Executive Officer Klaus Zumwinkel was convicted of tax evasion and received a two-year suspended prison sentence plus a penalty of 1 million euros ($1.25 million).

Under pressure from the U.S., Germany and France, Liechtenstein said in March 2009 that it would conform with tax standards set out by the Organization for Economic Cooperation and Development to avoid being blacklisted as a tax haven.

Markus Amman, a spokesman for the Liechtenstein government, and Katja Gey, who helped negotiate a tax deal for the principality with the U.K., didn’t answer calls to their mobile phones.

“It’s only a question of time, say three to five years, when this type of group request will become standard for future business,” said lawyer Frick. “Liechtenstein is a small country that has had a reputation for not cooperating in the field of tax and that’s something that has to change. We have to find new areas of business.”

To contact the reporter on this story: Dylan Griffiths in Geneva at dgriffiths1@bloomberg.net

To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net

Swiss minister sees U.S. tax deal by Nov-paper

ZURICH, June 9 | Sat Jun 9, 2012 5:58pm IST

(Reuters) - U.S. officials seem to want an end to a dispute over wealthy Americans with hidden Swiss offshore bank accounts before the U.S. presidential election in November, the Swiss finance minister said in a newspaper interview on Saturday.

"My impression at the moment is that the U.S. wants a solution by the elections. Both sides endeavour to find a solution in the foreseeable future," Switzerland's finance minister Eveline Widmer-Schlumpf told Basler Zeitung.

Eleven Swiss banks - including Credit Suisse and Julius Baer - are under investigation by the United States for aiding U.S. citizens suspected of dodging taxes with the help of offshore bank accounts. Switzerland wants the investigations dropped, in exchange for payment of fines and the transfer of names of thousands of U.S. bank clients. At the same time, Switzerland is seeking a deal to shield the remainder of its 300 or so banks from U.S. prosecution.

The talks appear to have stalled in recent months. A visit by Widmer-Schlumpf to Washington in April brought no breakthrough.

The U.S. prosecutor most closely linked with piercing the veil of Swiss bank secrecy, Kevin Downing, quit to join a law firm earlier this month, a move which experts say won't hinder U.S. efforts to pursue Swiss banks.

U.S. tax prosecutor Downing resigns, joins Miller & Chevalier

Reuters By Lynnley Browning

Kevin Downing, the former U.S. Department of Justice Tax Division Attorney, had investigated UBS. REUTERS/Arnd Wiegmann

 The U.S. prosecutor most responsible for piercing the veil of Swiss bank secrecy has joined the law firm of Miller & Chevalier, where he will focus on defending banks and other institutions involved in tax-related matters and controversies.

Kevin Downing, who resigned last week from the U.S. Department of Justice, said he expects to advise companies rather than individuals. Miller & Chevalier, based in Washington, D.C., has an extensive concentration in tax and international litigation.

Downing, 46, had led the Justice Department’s criminal probe of the Swiss banking industry. He oversaw the deferred-prosecution agreement sealed in 2005 with UBS AG, Switzerland’s largest bank, over charges that it sold tax-evasion services through its private bank to wealthy Americans.

Downing was not a political appointee to the department but is still banned from contact with former agency colleagues for one year. In an interview on Sunday, he said he expected part of his work to involve advising financial institutions on complying with the Foreign Account Tax Compliance Act, or FATCA.

FATCA, enacted by Congress in 2010, is intended to help the U.S. Internal Revenue Service gather information about Americans’ accounts with more than $50,000 in assets in foreign banks and other institutions.

Scheduled to take effect in 2013, the new law calls for banks and financial institutions worldwide to gather the information and directly disclose it to the U.S. Internal Revenue Service (IRS) tax collection agency.

Downing joined the Justice Department in 1997, and first made his name by leading the investigation of banks, accounting firms and law firms that sold bogus tax shelters to retail investors. Under his direction, that probe culminated in a deferred-prosecution agreement with KPMG, a Big Four accounting firm, in 2005.

KPMG averted indictment by admitting to criminal wrongdoing and paying a $456 million fine.

Under Downing’s direction, 11 Swiss and Swiss-style banks, including Credit Suisse AG, faced criminal investigation. Dozens of Swiss private bankers and their American clients have been indicted in recent years.
Last February, under Downing’s supervision, Wegelin & Co, Switzerland’s oldest private bank, was charged with enabling wealthy Americans to evade taxes on at least $1.2 billion hidden in offshore bank accounts.