The IRS list of Foreign Financial Institutions or Facilitators, or as we refer to it, "the Bad Boy list" has not been updated until recently. And until recently all of the names on the Bad Boy list weren't people, but entities. On November 15, 2016 that all changed as the IRS added a large amount of individuals (along with a few more entities) to the list. The 47 new names added to the list consist of 40 individuals and 7 entities, bringing the new grand total to 144.
The Significance of being on the Foreign Financial Institutions or Facilitators list
If your bank, or a person you dealt with is on the Foreign Financial Institutions or Facilitators list and you use the IRS Offshore Voluntary Disclosure Program (OVDP), you will subject to the enhanced offshore penalty of 50% as opposed to a 27.5% penalty. This is true unless you got your disclosure in before the effective date of the names being added to the list; this latest update was 11/15/2016. This penalty applies to all offshore assets used in avoiding the payment of taxes, including non-bank assets. However, the mere fact that someone you dealt with is on this the list does not automatically mean you must enter into the OVDP and pay the 50% penalty.
You have options.
Entering into the Full OVDP is a prudent course of action for many concerned about their legal exposure. But, if you believe you did act innocently or at worst negligently, and you are not worried about unhelpful evidence being revealed, you may consider "Opting-out" of the OVDP for a lower penalty. You could also enter into the Streamlined program, which will have a 5% penalty or 0% penalty, depending on if you live in the US or not. US Expats abroad are entitled to the 0% penalty. If you have not made a disclosure yet and you recognize an individual below it is essential you understand your outcome is highly dependent on implementing the best legal strategy.
We recommend you contact us for a first or second opinion. Call us at 888-727-8796 or email us at firstname.lastname@example.org to schedule a free, confidential consultation.
The names of the individuals are in bold; next to their name is the effective date of them being added to the list.
UBS bankers and related facilitators
Bradley Birkenfeld (effective 11/15/16) is an American banker and whistleblower whose disclosures to the United States government led to a massive fraud investigation against the Swiss bank UBS and other banks that had enabled tax evasion by U.S. taxpayers. In February 2009, as a result of the information he gave U.S. authorities, the U.S. Department of Justice (DOJ) announced it had reached a deferred prosecution agreement with UBS that resulted in a $780 million fine and the release of previously privileged information on American tax evaders. As a result of the financial recoveries facilitated by his whistleblowing, Birkenfeld received a $104 million award from the IRS Whistleblower Office in September 2012.
Birkenfeld’s key role as a financial industry whistleblower was recognized by Tax Analysts, a nonprofit organization that provides news and analysis to financial officers and tax accountants, when it declared him its 2009 Person of the Year. Calling him “the Benedict Arnold of the private banking industry”, Tax Analysts said that he “single-handedly” brought about serious changes to the global tax system through his revelations about tax evasion that caused governments to go after "tax cheats".
Renzo Gadola (effective 11/15/16) worked at UBS from 1995 to 2009, pleaded guilty in the United States in 2010 to conspiring to defraud the Internal Revenue Service and in 2011 was sentenced to five years' probation and fined $100. Gadola started cooperating with U.S. officials almost immediately after his arrest in 2010, providing insight into other bankers and Swiss financial institutions offering offshore banking services, according to prosecutors at the time of his sentencing in 2011.
Martin Lack (effective 11/15/16) an ex-UBS AG banker pleaded guilty in 2014 to aiding wealthy Americans in evading taxes, avoided prison for a 17-year scheme in which he helped U.S. clients maintain secret overseas accounts. Lack, a Swiss resident and citizen and an independent investment adviser, was sentenced to five years of probation and fined $7,500 when he was indicted in 2011.
Mario Staggl (effective 11/15/16) is a Liechtenstein investment adviser indicted in a tax-evasion probe of UBS AG. For years he helped scandal-tainted clients manage money stashed around the world. Staggl told German prosecutors he set up companies for a consultant in South Africa who later pleaded guilty to trying to help Libya obtain nuclear bomb-making equipment and provided similar services to an engineer being tried in Germany on related charges.
Beda Singenberger (effective 11/15/16), a Swiss financial adviser has been charged with helping more than 60 U.S. taxpayers hide more than $184 million in Swiss bank accounts and move assets from UBS AG to other Swiss banks to avoid getting caught. Singenberger, owner of Zurich-based Sinco Treuhand AG, was indicted on a charge of conspiring to hide clients' income from the Internal Revenue Service from 1998 to 2009. It appears as if he is still in Switzerland and remains free.
Gian Gisler (effective 11/15/16) allegedly opened and managed more than 60 hidden accounts on behalf of over 38 US taxpaying clients, the Justice Department said. Beginning in the mid-1990s, Gisler was a client adviser at UBS until late 2008, when a US investigation into UBS became public and he then began working for a Swiss asset management firm, according to prosecutors.
Credit Suisse Group Facilitators
Christos Bagios (effective 11/15/16) was previously employed by the Swiss financial giants UBS and the Credit Suisse Group. He pled guilty in 2012. Bagios worked at UBS from 1999 to 2005. He was a senior banker at Credit Suisse when he was arrested in New York in January 2011. He was later charged with helping 150 Americans hide as much as $500 million during his time at UBS.
Andreas Bachmann (effective 11/15/16) Swiss national, and Josef Dörig (effective 11/15/16) are both ex-employees of Credit Suisse Group. They admitted to one count of conspiring to defraud the U.S., which carries a potential penalty of five years in prison. Prosecutors agreed to recommend a reduced sentence in return for their cooperation. They catered to dozens of Americans with Swiss bank accounts, sometimes lugging bags of cash on flights across the U.S. Both avoided prison time, and were sentenced to five years of unsupervised probation for their roles in helping U.S. customers hide earnings from American tax authorities through a web of secret Swiss accounts and shell companies. Mr. Dörig also was fined $125,000 and Mr. Bachmann, $100,000.
Markus Walder (effective 11/15/16), the former head of Credit Suisse's North America Offshore Banking, Susanne D. Ruegg Meier (effective 11/15/16), along with Marco Parenti Adami (effective 11/15/16), Emanuel Agustino, (effective 11/15/16), Michele Bergantino and Roger Schaerer (effective 11/15/16) were alleged to have "engaged in illegal cross-border banking that was designed to assist US customers evade their income taxes by opening and maintaining secret bank accounts at the bank and other Swiss banks."
Michele Bergantino (effective 11/15/16) a former Credit Suisse AG banker pleaded guilty in 2016 on charges he helped US taxpayers evade income taxes. A citizen of Italy and resident of Switzerland, Bergantino admitted that from 2002 to 2009, while working for Credit Suisse in Switzerland, he participated in a wide-ranging conspiracy to aid U.S. taxpayers in concealing assets and income in secret Swiss bank accounts, the department said.
Joshua Vandyk (effective 11/15/16) along with Eric St-Cyr (effective 11/15/16) and Patrick Poulin (effective 11/15/16) were charged in a sting operation and pleaded guilty to helping launder what they was told were proceeds of a bank fraud designed to hide $2 million from U.S. tax officials, according to the Justice Department. The three all pleaded guilty to conspiring to launder monetary instruments in 2014.
United Revenues Service Group
David Kalai and Nadav Kalai (effective 11/15/16) were principals with United Revenue Service, a nationwide tax return preparation business. Among the locations they worked were company offices in Newport Beach and Costa Mesa. According to a federal indictment, the two men prepared false income tax returns for their “high net-worth” clients that served to conceal millions in assets and income in “secret” foreign bank accounts. They were also accused of maintaining a secret offshore account of their own at a Bank Leumi in Luxembourg in the name of a “sham corporation." As of this writing, appears as it a third alleged co-conspirator, David Almog (effective 11/15/16), has not been apprehended.
Neue Zurcher Bank
Matthias Rickenbach (effective 11/15/16) was a lawyer who worked with Schumacher. According to the indictment against the two, "Schumacher and Rickenbach helped wealthy American clients conceal their assets by establishing sham and nominee offshore entities to hide their U.S. clients' assets and income while allowing these clients to still control the assets and make investment decisions," the Justice Department said in a statement.
The Belize-Nevis Conspiracy
Michael Little (effective 11/15/16). The German-born lawyer is accused of engaging in decade long tax evasion scheme in which he helped the family of late Fidelity exec Harry Seggerman hide at least $10 million overseas. The 61 was set at a $2 million bail with home monitoring after being arrested at JFK airport. In his that in his dealings he would use code words to try to hide his communications; "small" was used to refer to Michael Little, "beef" meant money, "lbs" meant $1,000 and "FDA" referred to the IRS.
Swiss Private Bank Rahn & Bodmer
Martin Dunki (effective 11/15/2016), former vice president at Swiss private bank Rahn & Bodmer was indicted in the United States on charges of conspiring to help Americans evade taxes by using secret accounts. The government claims that he and Zurich-based lawyer Edgar Paltzer (effective 11/15/16), starting in 1999, along with an unidentified lawyer in Santa Barbara, California, began working together to manage undeclared accounts at Rahn & Bodmer, prosecutors said. Paltzer was a prominent Zurich attorney who specialized in trusts and was a partner of firm Niederer Kraft & Frey. Paltzer had already declared himself guilty in 2013 and subsequently worked with the US authorities. Paltzer, a dual U.S.-Swiss citizen, pleaded guilty in August 2013 to conspiracy and has cooperated with U.S. authorities. Working with Paltzer was a Swiss asset manager, Peter Amrein (effective 11/15/16), who is alleged to have helped US customers avoid millions in US tax. At that time, Amrein is said to have opened accounts for US customers in at least five Swiss banks, including Bank Wegelin & Co. He is also said to have helped to set up several Scheingellschaften, the German word for "shell company," based in Liechtenstein.
Julius Baer facilitators
Daniela Casadei (effective 11/15/16) and Fabio Frazzetto (effective 11/15/16), are former client advisers with the Swiss bank Julius Baer effective 2/4/2016). They entered their pleas in Manhattan federal court after voluntarily agreeing to face the charges. Both are Swiss citizens normally beyond the reach of U.S. extradition. Casadei and Frazzetto were indicted 2011. Prosecutors said they conspired with various U.S. taxpayers and others to ensure their clients could hide their Swiss bank accounts and the income generated in them from the Internal Revenue Service. As part of the scheme, Casadei and Frazzetto opened and managed undeclared accounts in fictional names like "Hydrangea" and "Red Rubin" or in the name of foreign relatives or sham corporate entities, prosecutors said. Their appearance in court came after Julius Baer in December said it had reached an agreement in principle with U.S. authorities to pay $547.25 million to settle an investigation into allegations it helped wealthy American clients evade taxes.
Other Swiss Bankers and facilitators
Felix M. Mathis (effective 11/15/16) an attorney practicing in Zurich, Switzerland, was charged with conspiring to defraud the United States and structuring the importation of currency into this country. Interpol lists him as a fugitive. Mathis and a Swiss banker are said to have assisted a US client, Andrew Silva, in concealing the ownership of a Swiss Bank account. According to court documents, with the assistance of Mathis, Silva mailed 26 packages containing over $200,000 in U.S. currency from Switzerland to the United States to himself and another person. This was done instead of wiring the funds back the US, as the wire creates a money trail.
Michael Berlinka (effective 11/15/16), Urs Frei (effective 11/15/16) and Roger Keller (effective 11/15/16) are ex-bankers at Wegelin & Co. Keller was nabbed by Germany authorities last year and is currently fighting extradition to the U.S. to stand trial. Berlinka and Frei have effectively disappeared from public view and presumably live in relative anonymity in Switzerland, which doesn't extradite its own citizens for crimes the two stand accused of.
Josef Beck (effective 11/15/16), is a Swiss citizen works as an advisor at Beck Verwaltungen AG. The US claims Beck, with the Founder of Beck Verwaltungen, various U.S. taxpayers, Wegelin, UBS, and others known and unknown to ensure that his US clients could hide their Swiss bank accounts, and the income generated in those accounts, from the IRS and assisted them in filing fraudulent returns.
Hans Thomann (effective 11/15/16) handled around 32 accounts holding $138 million for U.S. clients of UBS, and helped around 13 of them transfer their accounts to Wegelin and other Swiss banks when UBS came under pressure from U.S. authorities around 2008, it said. Thomann also helped clients fleeing UBS transfer accounts to the Swiss branch of an unnamed Israeli bank, it said.
Stephen Fellmann (effective 11/15/16), Christof Reist (effective 11/15/16) and Otto Huppi (effective 11/15/16) — a U.S. citizen — allegedly helped their taxpayer clients evade U.S. income taxes by opening and managing undeclared accounts at an unnamed Swiss bank. The three former Swiss bankers allegedly helped their clients dodge $423 million in U.S. income taxes by hiding money in offshore bank accounts. The trio allegedly worked as client advisers at the bank, which is headquartered in Switzerland and provides private banking, asset management and other financial services to a global list of clients, prosecutors said. The bank, which was not named in the indictment, does not have offices in the U.S., according to the indictment. It helped 190 U.S. citizens evade part of their tax obligations, prosecutors allege. From 2003 to 2009, Fellmann, Huppi and Reist opened undeclared accounts for U.S. taxpayers at the bank, using code names such as “Raincity” or naming them after fake corporate entities to hide their ownership, according to the indictment. Huppi in particular provided his clients access to the offshore accounts by mailing checks from a correspondent bank account maintained by the Swiss bank at a separate financial institution in Manhattan, prosecutors said.
Stefan Buck (effective 11/15/16) a former employee of Bank Frey & Co. AG, a small bank in Zurich that is now defunct, is claimed to have conspired with Americans to defraud the U.S. of taxes.
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The official list can be found here.