Under pressure from the IRS, Swiss banking giant UBS is closing the offshore accounts of about 19,000 Americans suspected of evading taxes. UBS will transfer the clients' assets to other banks, other divisions of UBS, or the account holders themselves—creating a paper trail that the feds can examine. The move marks a sea change for Swiss banking secrecy, reports the New York Times.
Prosecutors allege that UBS helped its clients hide about $18 billion, costing the IRS $300 million in revenue. But since some clients failed to fully disclose their holdings—or outright lied to the authorities—the new paper trail may provide criminal evidence of not just tax evasion, but money laundering. "You can either take that check and throw it in the woods, or deposit it somewhere and get busted," said one anonymous UBS client. "There's nowhere to hide."