It appears the Swiss have had to dig deep into their pockets now that another bank is set to pay U.S. authorities a hefty sum. This time it’s the Swiss bank Wegelin & Co. that’s doing the paying, in the amount of a whopping $122.9 million. The money is in penance for the part the bank played in helping wealthy U.S. taxpayers hide billions of dollars from the Internal Revenue Service (IRS).
The IRS first began inquiring into Wegelin’s activities back in 2011. It quickly became apparent that the bank had played a substantial part in the falsification of U.S. taxpayer returns, as well as the transference of funds to other accounts.
Lawbreakers caught in the act of hiding income and assets from the authorities always attract hefty financial penalties. In addition to the fines imposed, all U.S. taxpayers involved in this case have been ordered to pay millions in back taxes and interest.
That’s not all, though. The Department of Justice is also pursuing further measures, including criminal charges for those involved. Wegelin will also be made to give up all profits gained from the actions and pay a order of $22.9 million to the IRS Whistleblower Program for high value cases. According to the faith of the agreement reached between the U.S. and Wegelin, the tax-evading funds must be recovered and handed over to the IRS.
For guaranteeing the details of the scheme stayed secret, Wegelin has agreed to pay a further sum of $20 million to the DOJ.
Wegelin, in effect, will now part from with its money a well as reputation thanks to its part in the scandal. Officials are keen to make an example of the financial institution in order to dissuade others from taking part in similar schemes in the future.
By paying such massive sum of money this time, banks in the future may think twive before racketeering. The case also serves as a reminder to those considering tax fraud, of the tight grip that authorities have. In this case, wrongdoers were brought to justice even when their deeds were committed overseas.