It is not a new story. The very rich trying to evade the IRS for what should be considered pocket change and ending up jailed and fined. The most brilliant behavioral psychiatrist would have trouble figuring out why. Ms. Arlette Ricci, heiress to French fashion deigner Nina Ricci’s Estate was convicted of tax fraud and sentenced to one year in jail for hiding millions in an HSBC account. Following her prison term, there will be a two year suspended sentence and she was fined one million euros and had two properties confiscated worth 4 million euros. This does not include the millions in back taxes which must be repaid.
HSBC’s Swiss private banking division is under scrutiny after a leak revealed huge tax fraud and many other prosecutions of the rich and famous are expected. The identities of thousands of HSBC clients were obtained by the French Government in 2009 by whistleblower Herve Falsiani a former employee of the bank’s Swiss unit.
A fairly recent American law called the Foreign Account Tax Compliance Act (FATCA) has forced banks in many nations to reveal the identities of American tax evaders hiding their moneys abroad. FATCA requires foreign banks to reveal Americans with accounts over $50,000 and non-complaint banks are not allowed to do business in the United States. The United States taxes its citizens-even permanent residents- on their worldwide income regardless of where they live.
Recently Credit Suisse paid a record $2.6 billion fine for hiding American taxpayer assets. Other settlement discussions with other banks are ongoing.
Jeffrey Newman represents whistleblowers