Legal News

HSBC Bank USA Picks Up Wilmer in Tax Evasion Probe

By Mike Scarcella

Wilmer Cutler Pickering Hale and Dorr is representing HSBC Bank USA as the Justice Department and IRS investigate whether U.S. residents are hiding money overseas to avoid paying federal taxes.

DOJ yesterday asked a federal judge in San Francisco to authorize the IRS to serve "John Doe" subpoenas to acquire the names of U.S. taxpayers with accounts at HSBC India.

Prosecutors believe U.S. taxpayers are hiding money in accounts in India to evade federal taxes. The government?s team is led by Tax Division senior trial attorneys Kevin Downing and John Sullivan and trial attorneys Mark Daly and Michelle Petersen.

Downing was a lead attorney in the case against UBS A.G., Switzerland?s largest bank, which entered a deferred prosecution agreement in February 2009 with the Justice Department to resolve allegations of conspiracy to defraud the United States. In an agreement with UBS and the Swiss government, the IRS won access to thousands of accounts.

?The ability to hide accounts in foreign countries is rapidly dwindling,? John DiCicco, principal deputy assistant attorney general, said in a written statement yesterday. ?We will continue working hand-in-hand with the IRS to enforce the tax laws against those who are using offshore accounts?wherever they are located?to evade taxes.?

Daly, Sullivan and Downing are participating in the prosecution of four Swiss bankers in a fraud case in the U.S. District Court for the Eastern District of Virginia. A grand jury in February indicted the men on charges of helping U.S. taxpayers use Swiss accounts to evade paying federal taxes.

In the HSBC investigation, Wilmer has put together a team that includes Jamie Gorelick, who chairs the firm?s public policy and strategy practice group, and Reginald Brown, a partner who practices in regulatory and government affairs. Gorelick played a lead role as counsel to oil giant BP PLC last year. Brown advised Bank of America Corp. in the Financial Crisis Inquiry Commission.

Wilmer partner Russell Bruemmer, who chairs the firm?s financial institutions practice, is also on the HSBC team, in addition to Carl Nichols, a partner in the litigation and controversy department. Nichols, a top Justice civil litigator, joined the firm last year.

Full post as published by The BLT: The Blog of Legal Times on April 08, 2011 (boomark / email).