Offshore Initiative – Another NPA reached: DOJ 23.8 million settlement with Liechtensteinische Landesbank AG (LLB-Vaduz)

On July 29, the United States Justice Department (DOJ) announced in a press release that it had reached a $23.8 million settlement with Liechtensteinische Landesbank AG (LLB-Vaduz), halting its criminal investigation of the bank in aiding US citizen’s in evading their U.S. tax obligations.   As part of the investigation, the bank turned over the bank files of the U.S. citizens and green card holders.

“With this agreement, one of Liechtenstein’s most important banks has put an era behind it,” said U.S Attorney Preet Bahara in the DOJ’s statement. “Today’s agreement […] reflects the unprecedented nature of the bank’s cooperation, and serves as another reminder for U.S. tax cheats who mistakenly believe that their offshore bank will never turn over their account files to U.S. authorities. To them we say, you can hide, but not forever.”

According to court documents, LLB-Vaduz was accused of maintaining undeclared bank accounts for American tax evaders from 2001 to 2011. At the end of 2006, LLB-Vaduz held more than $340 million in more than 900 accounts owned by taxpayers from the United States.

Unlike some other European countries that have shown resistance to helping the DOJ and Internal Revenue Service (IRS) find American account holders, Liechtenstein has been particularly cooperative. Reuters reports that tax preparers in the tiny nation have been quick to respond to IRS requests, sending the names and account information to the agency.

All United States citizens and green card holders who hold funds in foreign accounts are required by law to declare their assets to the IRS. With the upcoming implementation of the Foreign Account Tax Compliance Act (FATCA), in 2014 it will be close to impossible to hold undeclared assets, making certain many more taxpayers at risk of criminal prosecution.

If you are the holder of a foreign bank account, it is essential that you seek advice from an experienced tax attorney.

The tax lawyers at Moskowitz LLP are available to consult with you about how you can become compliant with U.S. tax laws while minimizing your civil and criminal exposure.