You may be thinking that some of your money should be outside the USA. The government suspects this. So, it is cutting off your escape hatches. It does not trust you.
The government has charged a 271-year-old Swiss bank with criminal charges. Its crime? Obeying Swiss law.
Swiss law does not honor U.S. laws on tax evasion. So, it broke no law in Switzerland. It had no branch office in the USA. But the IRS will prosecute.
Result? The bank has closed its doors.
The tax money is peanuts: under $1.3 billion. That would not run the government for more than a few hours. Then what is this all about? Making sure Swiss banks refuse to deal with Americans.
Your escape hatches are closing.
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US prosecutors have filed criminal charges against Wegelin, a 271-year-old private Swiss bank, for allegedly helping Americans evade paying taxes on $1.2bn in assets, marking the first time US authorities have indicted an overseas bank for aiding tax fraud.
The indictment, a dramatic move that is often a death knell for financial institutions, follows Wegelin’s sale of its non-US business last week to Switzerland’s Raiffeisen, a co-operative banking group, for an undisclosed amount. The sale came two weeks after the US Department of Justice announced criminal charges against three Wegelin bankers and implicated senior Wegelin executives in court filings. . . .
The investigation has ricocheted around Zurich and comes as the US and Swiss are trying to negotiate a tax deal concerning undeclared US accounts. It is not clear how the criminal charges levied against Switzerland’s oldest private bank will affect the negotiations.
At the time of the sale, Pierin Vincenz, Raiffeisen’s chief executive, said the bank had lengthy discussions with Switzerland’s Finma supervisory authority, which is one of the Swiss government bodies involved in the negotiations with the US. . . .