Thursday’s Headlines: U.S. cracks down on secret bank accounts with subpoenas

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The U.S. government has begun using an arcane legal tactic to track down tax evasion suspects, a move usually reserved for drug dealers, money launderers and high-profile embezzlers, Reuters reports.

The tactic involves issuing subpoenas—official documents which force the recipients to supply crucial evidence—to U.S. taxpayers believed to own secret accounts in Switzerland and other countries.

“The grand jury subpoenas are unusual in that they ask bank clients—not the banks themselves—to turn over to the authorities their bank account details since 2003, including statements with the highest annual balances. Taxpayers who refuse to comply potentially face a stark choice: be found in contempt of court and thus subject to civil or criminal fines and jail time, or disclose potentially incriminating evidence against themselves,” Reuters writes.

This type of approach was used in the U.S. case against Imelda Marcos, the widow of the Philippine dictator, who became famous for embezzling official funds to build up a large shoe collection.

Reuters reports that defense lawyers are “furious” over the tactic because it sidesteps international bank secrecy treaties which allow banks in Switzerland, for example, to keep client data confidential.


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AIG CEO Benmosche plans to run company longer than expected, until 2012. [Dow Jones Newswires]

U.S. financial advisors most worried about European spillover in 2012, survey shows. [Investment News]

New evidence underscores that MF Global was careless with customer money. [DealBook]

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European banks eager to raise cash by selling Persian Gulf loans to Arab banks. [Bloomberg]

Alleged fraudster R. Allen Stanford fails to delay trial; jury selection begins January 23. [Businessweek]

Japan’s two largest bourses to seek ways to speed up merger. [Wall Street Journal]

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