At first glance the name Leslie Caldwell might not mean much. Ms. Caldwell is President Obama’s appointment to head the Criminal Division of the Department of Justice. She was confirmed last month. This new position follows a stretch of relatively quiet private practice. But more than a decade ago, Ms. Caldwell made waves as the chief prosecutor in the case that destroyed accounting juggernaut Arthur Andersen. Ms. Caldwell’s appointment certainly doesn’t seem an accident in light of the Justice Department’s increase focus on foreign banks like Credit Suisse and BNP Paribas.
In the wake of the Enron collapse, Ms. Caldwell headed up an investigation of Arthur Andersen LLP, one of the largest accounting firms in the world at the time, for their possible culpability in the Enron scandal. An investigation characterized by aggressive conduct on the part of Ms. Caldwell, the resulting conviction was later overturned nine to zero by the Supreme Court. The damage had already been done, however, and Arthur Andersen had lost its client base.
Not long after Ms. Caldwell’s current appointment, Credit Suisse plead guilty to the tune of $2.6 billion in fines and the French bank BNP Paribas will face a fine of between $8 and $9 billion in addition to a temporary on the bank’s ability to conduct transactions in U.S. dollars. With FATCA expanding the U.S.’s ability to collect information on foreign accounts and assets and providing increased leverage on foreign financial institutions, it’s reasonable to expect more investigations, more fines, and more agreements so hare information on U.S. depositors.
The silver lining for taxpayers with as yet undisclosed offshore assets is to be found in the IRS’s Offshore Voluntary Disclosure Program (OVDP). By coming clean to the IRS about their offshore accounts and foreign assets, taxpayers receive reduced penalties and avoid criminal prosecution. If the IRS has already begun investigating the taxpayer, however, they are no longer eligible for the OVDP. Recently instituted rules also remove the penalty reduction if the IRS or the Department of Justice has begun an investigation into the bank holding the taxpayer’s accounts.
Horowitz Law Offices has represented clients through the OVDP since its inception. You are welcome to contact us at (312) 787-5533 or email@example.com