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A settlement between federal prosecutors and UBS, accused of helping America's wealthy cheat Uncle Sam out of his taxes, appears likely to be struck tomorrow in Miami's federal court. The deal -- brokered through intense negotiations by diplomats -- is not likely to produce the names of the approximately 52,000 misers who investigators say held secret accounts with the bank. Nor will the bank be fined. In February, UBS agreed to pay $780 million to settle a related case in Fort Lauderdale's federal court.
It's believed that UBS will, however, give the names of some 5,000 tax cheats -- perhaps even the biggest among them. Or at least that's what a U.S. government source told Reuters. A piece of scuttlebutt that will weigh heavily on the consciences of the most wealthy tax-evading Americans, who have been given till September 23 to fess up to their dirty deeds. These volunteers may face only civil suits, rather than criminal prosecution, so long as they tell the feds exactly who helped them. USA Today got hold of the questionaire that the feds are circulating to the lawyers of anxious UBS accountholders.
An imperfect solution, because if these high-flyers can afford their own personal Swiss banker they can also afford a team of lawyers who can minimize the damage. But given the scale of this case, it's hard to conceive of a more realistic, cost-effective strategy for recovering the billions of lost tax dollars.
Besides, by targeting the financial advisers who show wealth clients the way to tax havens, prosecutors may be able to deter this practice in the future.