DOJ Targeting Offshore Accounts in India, Singapore
By Aruna Viswanatha | July 6, 2010 10:37 am

The Justice Department sent letters to HSBC Holdings Plc clients suspected of failing to disclose offshore bank accounts in India and Singapore to the Internal Revenue Service, Tax Notes Today reported Friday and Bloomberg reported Tuesday, citing lawyers who read the letters.

The letters signal that the DOJ is widening a probe into offshore tax evasion beyond Switzerland and that country’s largest bank, UBS AG. UBS paid $780 million last year and turned over data about thousands of clients  to settle charges that it helped individuals evade American taxes. The DOJ also prosecuted 17 UBS clients for tax evasion.

A lawyer who spoke to recipients of the letters speculated to Bloomberg that HSBC, under pressure, provided names to the DOJ.

The letters arrived in late June in the mailboxes of around a dozen HSBC clients and were signed by Kevin Downing, a senior Tax Division attorney who led the UBS probe, according to Bloomberg.

The letters went to U.S. residents who have ties to India, according to Bloomberg, including people who inherited money from relatives or maintained assets there after leaving the country. Some letters also referenced accounts in Singapore.

HSBC announced in March that client data from about one-third of its worldwide customers was compromised after a former bank employee stole information and turned it over to French tax authorities.

The U.S. Justice Department has so far gone after three HSBC clients this year for evading taxes using offshore accounts. One, a Virginia surgeon, was sentenced to two years probation, and the other two, who are hotel developers in Miami Beach, Fla., face trial in September.

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