Offshore tax evasion investigation
U.S. authorities have targeted Belize-based banks in a new expansion of their hunt for Americans suspected of evading taxes by hiding income and assets in offshore accounts.
A federal court in Miami on Wednesday approved special “John Doe” legal summonses seeking information about U.S. taxpayers who may hold undeclared accounts at Belize Bank International Limited or Belize Bank Limited.
The court order gave federal investigators authorization to seek records of so-called correspondent accounts the Belize banks maintain at Bank of America and Citibank. Information from those accounts, which enable foreign banks without a U.S. presence to handle transactions in U.S. dollars, is expected to help the IRS identify U.S. taxpayers who hold or held accounts at the Belize financial institutions.
- “These John Doe summonses will provide detailed information about individuals using financial institutions in Belize and, to the extent funds were transferred, other jurisdictions,” said acting Assistant Attorney General Caroline Ciraolo.
- “But rest assured, we are receiving information from many sources regarding hidden foreign accounts and offshore schemes.”
An IRS legal declaration said Belize Bank Limited is incorporated and based in the Central American nation, and directly owns Belize Bank International Limited. Another company, Belize Corporate Services, provides so-called “shelf” corporations, paper companies that can be named as the purported owners of offshore accounts.
All three entities are corporate subsidiaries of BCB Holdings Limited, according to the IRS declaration. That declaration described a federal revenue agent’s review of information gathered from Americans who came forward under a voluntary IRS disclosure program and provided information about accounts they once held at the Belize banks.
The court action marks federal investigators’ latest use of the special summonses to compel account disclosures by offshore banks suspected of helping wealthy American clients evade U.S. taxes.
The IRS previously used the tactic to pursue account data from banks elsewhere around the world, including Switzerland’s Zurcher Kantonalbank, Bermuda-based N.T. Butterfield & Son and London-headquartered HSBC’s India division.
U.S. investigators also won court approval in 2009 to serve John Doe summonses on Swiss banking giant UBS — the initial target in the continuing federal crackdown on offshore tax evasion.
UBS ultimately turned over information on an estimated 4,450 American clients. The bank, Switzerland’s largest, also paid a $780 million fine under a deferred prosecution agreement after acknowledging it had helped clients avoid U.S. taxes.
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