May 3, 2013

Justice Department seeks tax cheats in Caribbean

The government wants the names of taxpayers with an account at FirstCaribbean.

By BEN FOX The Associated Press

MIAMI - U.S. taxpayers who stashed money in one of the Caribbean's largest banks without telling the Internal Revenue Service could be in trouble.

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The IRS decided to investigate after 129 people voluntarily disclosed offshore accounts with FirstCaribbean International.

The Associated Press

The U.S. government has obtained a court order to collect the names of taxpayers who had an account with CIBC FirstCaribbean International Bank over an eight-year period ending Dec. 31 without disclosing it to the IRS.

It is too soon to say how many U.S. citizens held undeclared accounts at FirstCaribbean or what penalties they may face, Justice Department spokeswoman Dena Iverson said Thursday.

The U.S. obtained the order from a judge Tuesday after an IRS revenue agent reviewed information from 129 people who voluntarily came forward to disclose offshore accounts and decided further scrutiny of FirstCaribbean was warranted.

U.S. authorities have issued such blanket subpoenas, known as a "John Doe summons," to seek out tax cheats in the past, most notably in the case of UBS AG, the largest bank in Switzerland. Iverson said this was the first for a Caribbean bank.

The government's action should prompt concern for any financial institution in the region with a "willingness to be dishonest," said David Marchant, owner and editor of the influential OffshoreAlert newsletter based in Miami.

"The United States seems to be going from jurisdiction to jurisdiction with a big broom sweeping up and presumably they are working their way around the globe as it were," Marchant said. "And it seems to be the Caribbean's turn."

CIBC FirstCaribbean, based in Barbados, has 100 branches in 17 countries in the Caribbean, about 3,400 employees and more than $11.5 billion in assets, according to the company's 2012 annual report. A company spokesperson did not respond to requests for comment from The Associated Press.


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