Criminal investment schemes by financial houses for tax evaders

When customers complained to their “black money bank or insurance company”, especially because once again a CD-ROM with explosive data was offered for sale, the financial houses were happy to point out three alternatives.


First the voluntary disclosure, but that route would eat up all the assets, especially if significant investment losses and hefty fees have already gobbled up a large chunk of assets.

Secondly, criminal proceedings could already be underway, and this could lead to imprisonment as well as the total loss of assets and one’s own civil existence.

And thirdly the customer could “keep his nerve”, have the black money white-washed afterwards and try to sit everything out until then.

It is considered an open secret that Swiss banks are able to “cash in” additional amounts in the single or double-digit billions each year simply because black-money clients are, in fact, always open to blackmail. In the end, it is often found that even the immediate taxation of the black money income and investment in a domestic savings account with legally taxed interest would have brought more on balance.


New tax tricks on offer

In order not to have to disclose oneself to the tax authorities, but to get the prospect of “decolourisation” of the investment funds, banks in German-speaking countries offer their customers various “bleaching models”.

First of all, the zero bond: If the money is parked here, there is no liquidation of this investment, and if the customer holds out long enough, no interest accrues in the meantime, which is taxable. After ten years, the evasion is statute-barred, says the smooth banker from Salzburg.

When asked, the banker has no idea that the statute of limitations for tax evasion has been extended to more than ten years since the autumn of 2009, and that criminal money laundering only begins to be time-barred at all when it becomes successful. His solution is at least an incitement not only to evade taxes in the future, but also to launder black money – i.e. to return it to the regular economic cycle.

In Basel, too, an alternative has been found, because Swiss banking secrecy could soon be “history” – not only because downloading bank data onto CDs offers itself as a lucrative sideline and possibility of carefree retirement for bank employees with new identities procured by German law enforcement agencies.

The client should then put his assets into a life insurance shell in Liechtenstein. This would also defer the tax, until the withdrawal. A close examination reveals that the necessary risk protection, which is the hallmark of insurance and can lead to tax deferral, is not covered at all by the dwarf insurer based in the princely farmhouse.

The customer is deceived about the fact that he will never be able to obtain “white money” in this way, but will continue to be obliged to declare his earnings year after year and will continue to engage in criminal money laundering. In return, the bank or insurance sales force can expect a hefty commission for this misguided approach.


Pitfalls of the “laundry

Another idea is also offered in Zurich: The Swiss bank “anonymously” transfers the money into a fund that is managed in Germany by a bank based there. The money effectively remains at home, but is subject to the final withholding tax in Germany.

Every year ten percent are to be “white-washed” – as long as (one hopes) banking secrecy will survive. Small hook also at this smart construction: As soon as the black money existing with the German bank and/or with the customer is in connection with approximately 100,000 euro tax evasion, thereby additionally money laundering comes into question: And the stupid thing is that this infects the total assets.

The statute of limitations for money laundering has then not even begun, if after supposedly ten years there should be no punishment at all for tax evasion. In addition, “believers” evade church tax year after year, because this is not collected via the final withholding tax.


Fully in the grip of the banks

What is piquant about these models is that these exemplary camouflage constructs are usually set up with the involvement of “network partners”, for example law firms abroad. The bank then has the customer and his assets “fully under control” via these.

After all, if the customer ever fails to spurt as he should, the bank can ensure that the network partner simply does not renew the customer’s power of attorney. Part of this prefabricated house system is then also that the customer receives hardly or no documents to “his construction”. So in the end he put himself completely at the mercy of his bank, his trustee or a Liechtenstein insurance company.


Bank advisors reveal evaders

Nobody knows before the arrival of the tax investigation whether his name is stored on the data CDs. But there you will also find the names of the bank advisors in question from Switzerland – at least some .

Therefore, in principle, every bank advisor must fear first of all being arrested on suspicion of aiding and abetting tax evasion when crossing the border into Germany and being asked for the names of the tax evaders advised. Unfortunately, he does not know which of his clients are already known to the tax investigation – he has no choice but to be cooperative and admit to all names, even those that are not even on the CD.

Thus also the tax evaders come to the light, who were not noticed first of all by CD. For good reason, Swiss banks Photo: dpa/ picture alliance have therefore severely restricted the foreign travel of their advisors – otherwise they would not be able to return so quickly, because a lack of willingness to cooperate would mean a longer period in custody.


The voluntary declaration

Even if clients with black money fear self-disclosure, in the end there can in fact be “a considerable discount” if the facts of the case have first been examined from the point of view of criminal and tax law, and then negotiated with the tax authorities. It is not uncommon for the bank or insurance company to end up being liable for the tax losses – without suspecting it, of course. The self-disclosure “according to scheme F” cannot replace the tailor-made suit of individual analysis in this field either. In this way, not only can any tax penalty be avoided, but the additional payment can also be minimised.


by Dr. Johannes Fiala and Dipl-Math. Peter A. Schramm

by courtesy of (published in Mittelstandsmagazin, issue 05/2010, pages 24-25)

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Dr. Johannes Fiala Dr. Johannes Fiala

Dr. Johannes Fiala has been working for more than 25 years as a lawyer and attorney with his own law firm in Munich. He is intensively involved in real estate, financial law, tax and insurance law. The numerous stages of his professional career enable him to provide his clients with comprehensive advice and to act as a lawyer in the event of disputes.
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