UBP to pay additional $14M for hidden accounts

UBP signed the original non-prosecution agreement (NPA) on Jan. 6, 2016. At that time, UBP reported it held and managed 2,919 U.S.-related accounts, with assets under management of approximately $5 billion, and paid a penalty of $187.8 million.

In its agreement with the Justice Department on Thursday, however, UBP acknowledged it should have disclosed an additional 97 U.S.-related accounts at the time of the signing of the NPA. UBP acknowledged it knew about, or should have known about, many of these accounts at the time of the signing of the NPA.

“Foreign banks that participated in the Swiss Bank Program were obligated to identify all accounts in which U.S. taxpayers held an interest, directly or indirectly,” said Richard Zuckerman, principal deputy assistant attorney general for the tax division. The agreement with UBP “reflects our continued commitment to ensuring that when entities cooperate and make disclosures to the Department, that they do so fully,” he said.

About the Swiss Bank Program

The Swiss Bank Program provided a path for Swiss banks to resolve potential criminal liabilities in the United States relating to offshore banking services provided to U.S. taxpayers. Banks eligible to enter the program were required to advise the Justice Department they had reason to believe they had committed tax-related criminal offenses in connection with undeclared U.S.-related accounts.

As participants in the program, banks were required to make a complete disclosure of their cross-border activities, provide detailed information on an account-by-account basis for accounts in which U.S. taxpayers had a direct or indirect interest, cooperate in treaty requests for account information, and provide detailed information about the transfer of funds into and out of U.S.-related accounts, including undeclared accounts.

The Justice Department said it executed NPAs with 80 banks between March 2015 and January 2016 and imposed a total of more than $1.36 billion in Swiss Bank Program penalties.

Every bank that signed an NPA in the Swiss Bank Program represented it had disclosed all known U.S.-related accounts that were open at each bank between Aug. 1, 2008, and Dec. 31, 2014. Each bank also represented it would, during the term of the NPA, continue to disclose all material information relating to its U.S.-related accounts.

In the addendum to UBP’s NPA, the Justice Department said it “acknowledged UBP’s full cooperation under the [Swiss Bank] Program, including its assistance in making treaty requests for account records relating to the additional accounts.”