Federal Criminal Defense Blog : Georgia Federal Criminal Defense Lawyer & Attorney : Gillen Withers & Lake Law Firm : White Collar Crime, RICO, Trial : Atlanta, Savannah, GA

We knew it was coming, but Bloomberg reports today that Switzerland's Federal Tax Administration has said that it expects to deliver account data on almost 4,450 U.S. clients of UBS AG to the IRS in exchange for the IRS' withdrawal of a "John Doe" summons served on UBS and accompanying lawsuit. The IRS had sought information on approximately 52,000 UBS accounts, however the agency and UBS entered into a settlement in August 2009 in which UBS would provide information on 4,450 accounts. UBS also paid the U.S. government $780 million as part of the settlement. UBS was alleged to have aided wealthy U.S. citizens in evading taxes from 2000 to 2007.

The article notes that, since February 2009, the Justice Department has filed criminal tax charges against 17 U.S. clients of UBS clients, two UBS bankers and three others accused of aiding tax evasion.

And in Georgia tax news, the government has sued two tax preparers in Cobb County, Georgia, seeking to put them out of business, according to a press release. A complaint was filed in the U.S. District Court for the Northern District of Georgia against Christopher Musyoki, Samuel Nganga and Musyoki’s tax preparation business, Simba Consultants Inc., alleging that the defendants allegedly underreported their customers' income on tax returns and made false claims for earned income credits, child tax credits and fuel tax credits.

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The Federal government has massively ramped up enforcement against domestic and foreign corporations for violation of the Foreign Corrupt Practices Act (FCPA), essentially an anti-bribery or kickback statute applicable to overseas transactions. The latest target to fall to FCPA allegations, according to an SEC press release, is German automotive giant Daimler AG. The Securities and Exchange Commission had alleged that Daimler allegedly paid bribes to foreign government officials to secure business in Eastern Europe, Africa and Asia. Last Thursday, the SEC announced that Daimler had entered into a settlement agreement with the SEC in which Daimler agreed to pay $91.4 million in disgorgement. Daimler also agreed to pay $93.6 million in fines to settle alleged criminal charges which were announced by the Department of Justice last week.

The SEC complaint, filed on March 22, charges that Daimler allegedly paid $56 million in improper payments, involving more than 200 transactions in 22 countries, over a period of 10 years. The government contends that Daimler allegedly earned $1.9 billion in revenue and at least $90 million in illegal profits as a result of the payments. Included in the government's allegations are allegations that Daimler paid kickbacks to Iraqi officials in relation to sales of vehicles and spare parts to Iraq under the United Nations Oil for Food Program. The complaint also alleges that Daimler kept ledger accounts of credit balances for the benefit of foreign government officials.

Daimler allegedly made bribes or kickbacks through several methods. Amounts of alleged discounts or rebates on sales contracts were allegedly kicked back to foreign officials. Daimler also alleged used false sales intermediaries, corrupt business partners and cash desks to funnel bribes to officials. The government alleges that Daimler's management sanctioned the practices.

Daimler has issued a press release relating to the settlement. The company notes that it cooperated with SEC and DOJ during their investigations, entering into a consent agreement with the SEC and a deferred prosecution agreement with DOJ. The release also notes that Daimler North East Asia Ltd., also entered into a deferred prosecution agreement with DOJ and Mercedes-Benz Russia SAO and Daimler Export und Trade Finance GmbH pled guilty to charges of violations of the FCPA in the U.S. District Court for the District of Columbia.

Daimler also states that it has taken steps to ensure that its future conduct will comply with all applicable laws and Daimler's "Integrity Code." Daimler states that under its deferred prosecution agreements, it must maintain a comprehensive compliance program and not commit any further violations of the FCPA for two years. If Daimler successfully complies with these terms, the charges against the corporation and its subsidiaries will be dismissed.

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