UBS is closing their offshore accounts. These accounts have $18 billion in them. So they are sending these checks out to 19,000 people who have had undeclared accounts at UBS.
So how does UBS recapitalize it's banking system with these checks? Because some of these checks won't be cashed! Here's the story:
UBS will transfer the assets to other banks or other divisions within UBS, or will mail checks directly to the account holders, creating paper trails for federal prosecutors who are examining whether UBS clients used such accounts to evade taxes.
The clients now face stark choices: they can cash their checks, and thereby alert the authorities to any potential wrongdoing, or not cash them, effectively losing their money.
Or they can transfer the money to new banks, a procedure which, in the case of foreign banks, requires depositors of more than $10,000 to report the new account to the Treasury Department.
“You can either take that check and throw it in the woods, or deposit it somewhere and get busted,” said a UBS client, who asked not to be named because of the investigations into UBS and its clients. “There’s nowhere to hide.”
But because prosecutors claim that some UBS clients failed to make adequate disclosures in the past or lied on their tax returns about holding offshore accounts, the authorities may view the new disclosures as criminal evidence, not just of tax evasion but also of money laundering, a more serious offense.
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