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Harry Cassin
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‘Day of enforcement’ targets global tax evaders and money launderers

A globally coordinated day of enforcement action — involving sharing of evidence and intelligence, and information collection activities such as search warrants, interviews and subpoenas — against suspected offshore tax evasion orchestrated by a Central American financial institution was undertaken last week by the Joint Chiefs of Global Tax Enforcement (J5) from the United Kingdom, United States, Canada, Australia and the Netherlands.

The J5 was formed in response to a call to action in mid 2018 from the Organization for Economic Co-operation and Development (OECD) for countries to do more to tackle the enablers of tax and related crime by organized crime groups and wealthy individuals who are well resourced and have access to professional enablers.

The J5’s international investigation started with information obtained by the Netherlands. Their first coordinated multi-jurisdictional enforcement action occurred as part of a series of investigations into a Central American financial institution — not named by the J5—that is believed to be facilitating tax evasion and money laundering for customers across the globe.

“This is the first coordinated set of enforcement actions undertaken on a global scale by the J5 — the first of many,” said Don Fort, U.S. Chief of the Internal Revenue Service Criminal Investigation.

As part of the coordinated global effort, Her Majesty’s Revenue and Customs (HMRC) officers executed a search warrant in the Stoke area and arrested a 59-year-old man. HMRC officers also visited several businesses and sought information from them to assist with ongoing investigations against the suspected tax evasion and money laundering of more than £200 million ($260 million) in the UK alone. Simon York, Chief and Director of HMRC’s Fraud Investigation Service said, “This kind of international action shows that we can, and we will take on the most collaboration underlines our commitment to tackling these harmful, sophisticated and complex crimes and that we are committed to levelling the playing field for honest businesses and taxpayers.”

A number of clients were allegedly using the Central American offshore bank as part of a sophisticated system to conceal and transfer wealth anonymously and thereby evade taxes and launder the proceeds of crime. “Together as the J5 we will try to close the net on tax criminals” said Hans van der Vlist, Chief and General Director Fiscal Information and Investigation Service (FIOD), of the Netherlands.

Prior investigations — like those involving allegations against Swiss banks — were multinational, but conducted separately. This was a first combined global effort. It will likely lead to further criminal, civil and regulatory actions in each J5 country.

“I am very pleased with the role the CRA is playing in what will be the first of many major operational activities for the J5” said Canada Revenue Agency (CRA) Chief Eric Ferron.

In Australia, the Tax Officer has reportedly sent letters to hundreds of Australians who in recent years used accounts at the Central American bank.

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