UBS to close accounts

The Patriot Act could claim thousands of scalps in the coming weeks as Swiss banking giant UBS has announced that it will close some 19,000 accounts of their American clientele. From the NYT …

In a step that would have once been unthinkable in the rarefied world of Swiss banking, UBS will shut about 19,000 accounts that prosecutors suspect have gone undeclared to the Internal Revenue Service.

UBS will transfer the assets to other banks or other divisions within UBS, or will mail checks directly to the account holders, creating paper trails for federal prosecutors who are examining whether UBS clients used such accounts to evade taxes.

The clients now face stark choices: they can cash their checks, and thereby alert the authorities to any potential wrongdoing, or not cash them, effectively losing their money.

Or they can transfer the money to new banks, a procedure which, in the case of foreign banks, requires depositors of more than $10,000 to report the new account to the Treasury Department.

“You can either take that check and throw it in the woods, or deposit it somewhere and get busted,” said a UBS client, who asked not to be named because of the investigations into UBS and its clients. “There’s nowhere to hide.” …

But because prosecutors claim that some UBS clients failed to make adequate disclosures in the past or lied on their tax returns about holding offshore accounts, the authorities may view the new disclosures as criminal evidence, not just of tax evasion but also of money laundering, a more serious offense.

Indeed. Money Laundering is very, very serious.

It seems like the law that was designed to starve islamic terrorists of the money to finance their operations will be used to sock it to wealthy Americans who have evaded income taxes. Although the list of names that will surface will be interesting to see, the actions by UBS reveal the need for junking the tax code and replacing it with the Fair Tax.

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