Scarinci Hollenbeck, LLC
The Firm
201-896-4100 info@sh-law.comFirm Insights
Private Swiss Bank Closes Over Tax Evasion Dispute With U.S.
Author: Scarinci Hollenbeck, LLC
Date: October 28, 2013
Key Contacts
Back
Private Swiss bank Frey & Co AG announced that it’s closing its doors due to “unsustainable costs” stemming from the country’s dispute with the U.S. over alleged tax evasion. Frey will be the second bank – following Wegelin and Co. – to close after allegations of helping Americans evade U.S. tax law.
U.S. authorities have launched an investigation into several Swiss institutions for their complicity in tax law violations. A government program currently exists that enables Swiss institutions to voluntarily come forward and detail their actions in exchange for reduced penalty rates. Under the agreement, participating banks are required to disclose the amount of undeclared American assets on their books and pay related penalties. However, Frey is one of the 14 institutions ineligible for the program because it is already under investigation by the Department of Justice, Reuters reports.
Although Frey has not been indicted by the Justice Department, shareholders for the institution noted that increased regulatory scrutiny – and the costs associated with compliance – are too burdensome for the small bank. In addition, U.S. authorities have indicted Stefan Buck, the bank’s former head of private banking, for allegedly assisting Americans in hiding taxable income from the Internal Revenue Service, according to the Wall Street Journal.
“As a result of developments in recent years, circumstances and challenges have presented themselves, especially in Switzerland, that mean it no longer makes sense for a small bank to continue its cross-border services,” said Markus Frey, chairman of the board who founded the institution in 2000. “Bank Frey will therefore cease its operative business activities as a bank.”
Several Swiss institutions are currently under investigation for similar violations. The increased scrutiny is due in large part to the IRS’s attempt to close the multibillion-dollar tax gap, which the IRS estimates to be $385 billion.
- Practices: Tax and Trusts & Estates, International Law & Trade, Sophisticated Estate Planning & Wealth Preservation
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
SPACs Are Back, What You Need to Know
Special purpose acquisition companies (better known as SPACs) appear to be making a comeback. SPAC offerings for 2025 have already nearly surpassed last year’s totals, with additional transactions in the pipeline. SPACs last experienced a boom between 2020–2021, with approximately 600 U.S. companies raising a record $163 billion in 2021. Notable companies that went public […]
Author: Dan Brecher
Short Form Merger: Streamlining the Process for Businesses
Merging two companies is a complex legal and business transaction. A short form merger, in which an acquiring company merges with a subsidiary corporation, offers a more streamlined process that involves important corporate governance considerations. A short form merger, in which an acquiring company merges with a subsidiary corporation, offers a more streamlined process. However, […]
Author: Dan Brecher
Tariff Response Options for Small Businesses Facing Financial Distress
The Trump Administration’s new tariffs are having an oversized impact on small businesses, which already tend to operate on razor thin margins. Many businesses have been forced to raise prices, find new suppliers, lay off staff, and delay growth plans. For businesses facing even more dire financial circumstances, there are additional tariff response options, including […]
Author: Brian D. Spector
Common Causes of Partnership Disputes and How to Resolve Them
Business partnerships, much like marriages, function exceptionally well when partners are aligned but can become challenging when disagreements arise. Partnership disputes often stem from conflicts over business strategy, financial management, and unclear role definitions among partners. Understanding Business Partnership Conflicts Partnership conflicts place significant stress on businesses, making proactive measures essential. Partnerships should establish detailed […]
Author: Christopher D. Warren
Businesses Are Facing Financial Headwinds—A Practical Guide
*** The original article was featured on Bloomberg Tax, April 28, 2025 — As a tax attorney who spends much of my time helping people and companies who have large, unresolved issues with the IRS or one or more state tax departments, it often occurs to me that the best service that I can provide […]
Author: Scott H. Novak
President Trump's Termination of Member Gwynne Wilcox
On January 28, 2025, the Trump Administration terminated Gwynne Wilcox from her position as a Member of the National Labor Relations Board (NLRB or the Board). Gwynne Wilcox, a union side lawyer for Levy Ratner, was confirmed to the Board for an original term in 2021 and confirmed again for a successive five-year term expiring […]
Author: Matthew F. Mimnaugh
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.