WASHINGTON • Once bastions of secrecy, 41 Swiss banks signed amnesty agreements with the US Justice Department this year, requiring them to reveal how they helped wealthy Americans cheat on their taxes.
The banks - required to disclose tricks they used to help customers hide assets, name bankers and middlemen who enabled them and detail the flow of untaxed money - have also prodded thousands of reluctant Americans to disclose accounts hidden from the Internal Revenue Service (IRS).
The information is being passed to US investigators to try to build new cases against individuals and institutions in other countries, said Ms Caroline Ciraolo, the US Justice Department's top tax prosecutor.
Financial institutions in Singapore and Israel are possible targets, lawyers and prosecutors said.
"The money is moving out of Switzerland to a variety of jurisdictions," said Ms Ciraolo, an acting assistant attorney-general. "We're following leads and following the money, wherever that leads us."
The Swiss amnesty programme is part of a tax evasion crackdown that grew after 2009 when Switzerland's biggest bank UBS Group paid US$780 million (S$1.1 billion) to avoid prosecution, and the US began criminal investigations of 14 other banks, including Credit Suisse Group. Broadening the push, the US in 2013 offered to forgo prosecuting any Swiss bank that came clean on tax-evasion tactics. So far this year, the 41 banks paid combined penalties of US$354.5 million.
Certainly, Singapore would be one of the jurisdictions that we're looking at.''
MS CAROLINE CIRAOLO, the US Justice Department's top tax prosecutor
"It's impressive how far US prosecutors have got in the face of Swiss resistance," said University of Virginia law professor Brandon Garrett.
Another 40 or so banks may reach non-prosecution agreements this year, according to lawyers representing banks, as the amnesty programme winds down. That will free investigators to turn to probing banks in other countries.
US agents interviewed taxpayers who used a Singapore money management firm to hide assets from the IRS, said Mr Bryan Skarlatos and Mr Scott Michel, lawyers who separately represent some of those Americans. They would not identify the firm, and Ms Ciraolo would not discuss it. "Certainly, Singapore would be one of the jurisdictions that we're looking at," she said.
Israeli banks have drawn special focus from the Justice Department. Last year, then Deputy Attorney-General James M. Cole cited "an ongoing and extensive investigation" into hidden bank accounts in Israel. Bank Leumi Le-Israel agreed to pay US$400 million to resolve its criminal case.
The data coming directly from Swiss banks is supplementing a separate trove the IRS gathered from 50,000 US taxpayers who disclosed their offshore accounts and paid US$7 billion in back taxes, fines and penalties since 2009.
The 41 non-prosecution pacts, posted on the Justice Department's website, provide insight into tax evasion tactics used by bankers in Switzerland, where it has been a crime since 1934 to disclose client data.
They opened numbered accounts to hide the true owners, held mail to avoid paper trails and let clients access their secret accounts through credit cards, a review of the amnesty statements shows. Banks also helped clients make cash withdrawals to avoid US currency reporting requirements, or converted assets to gold held in safe deposit boxes.
Many clients disguised their money in entities set up in tax havens outside of Switzerland. Some banks admitted they accepted money from clients who were fleeing institutions that were already under probe.
Far more Swiss banks initially signed up for the amnesty programme - 106 - than expected, said its designer, Ms Kathryn Keneally. Banks were looking for "the finality of a resolution", she said.