Switzerland is famous for its numbered bank accounts that protect the holder’s identity. There are, however, laws in Switzerland and here in the United States against hiding that information from regulators. Daniel Walchli used the so-called “Singapore solution” to conceal $60 million in undeclared assets owned by American clients from the IRS. Walchli committed the illegal scheme through Privatbank IHAG between 2009 and 2014 – Walchli was a bank board member.
What is the Singapore solution?
This illegal scheme involves steps designed to conceal the American origins of the holders. He transferred money from the Swiss bank to one in Hong Kong and then back to the Swiss bank of origin in accounts held by a Singaporean asset manager controlled and owned by the Swiss bank’s holding company. The scheme deprived the IRS of more than $530,000 in tax revenue.
“Sophisticated means” involves more significant penalties
While corporate greed or lack of oversite involves hefty fines, fraud is a federal crime. Walchli could face the maximum penalty of five years. The sentence to be issued by the Southern District of New York is likely to be especially long because the defendant employed “sophisticated means” to engage in the illegal behavior. Walchli will also face additional financial penalties and a period of supervised release.
Walchli said he would not dispute the charges and potential penalties and acknowledged that he used “sophisticated means.”