Federal prosecutors are building criminal cases against 150 wealthy American clients of the Swiss banking giant UBS as part of a continuing investigation into tax evasion, a person briefed on the matter said Thursday.
Many of the inquiries, which are being handled by dozens of prosecutors around the country, will result in criminal complaints, said this person, who was not authorized to speak publicly. While it is not clear where the government got the 150 names, federal investigators received 285 names from UBS in February as part of a settlement, as well as names from other sources. In February, UBS agreed to pay $780 million to settle charges that it had helped American clients evade taxes on nearly $20 billion hidden in offshore accounts.
A day later, the Justice Department filed a civil suit seeking to require UBS to disclose the names of 52,000 clients. Of the names on the agency’s original list, prosecutors are focusing on several thousand Americans with offshore accounts containing tens to hundreds of millions of dollars, the person said.
On Wednesday, the Justice Department and UBS reached an agreement on the disclosure of additional names. Under it, UBS will release the names of clients who fit criteria set by the Justice Department.
A second person close to the matter who also was not authorized to speak for attribution said the criteria included clients who set up offshore entities to evade taxes and those who had contact with Swiss-based UBS bankers, in person, by telephone or by e-mail. Accounts over a certain dollar amount will be included.
The Internal Revenue Service plans to release the criteria next week, but the dollar threshold will not be publicly disclosed, these two people said. The authorities do not want UBS clients whose accounts fall below the threshold to think that they might avoid investigation, the first person said.
H. David Rosenbloom, a tax lawyer at Caplin & Drysdale who represents some American clients of UBS, called $1 million a “logical” threshold, but emphasized that the figure was only a guess.
A Justice Department spokeswoman declined to comment.
Justice Department authorities are also trying to track UBS clients through legal cases filed in Switzerland contesting the possible disclosure of their names.
While the identities of the clients and their lawyers have been concealed in court filings, the Swiss federal administrative court in Berne has given American authorities a means to get the names. In March, the court ruled that American regulators could get the name of a client if they could provide enough other detail so that the identity was unmistaken.
Americans who filed the cases in Switzerland are also required under the American criminal code to file full copies of their complaints with the United States attorney general. They have not done so, according to the first person, an omission that may open them up to a criminal complaint in the United States.