Harry Seggerman, a US citizen, died and left his wife and children $20mil which was held in Swiss Bank accounts.
The tax scheme, which was executed using code words, involved setting up various Swiss accounts and other foreign entities called “refrigerators.” To avoid detection by the IRS, the family took illegal money referred to as “beef” back to the US in small increments called “little chunks” using traveler’s cheques or by disguising money transfers as proceeds from artwork and jewellery sales.
The Seggermans had a choice when they inherited the money. They could have disclosed their father’s accounts to the IRS but chose not to.
Because there is now a tax treaty between the US and Switzerland, Swiss banks are required to turn over information on their US customers.
In the end four of the Seggerman siblings were charged and sentenced to four months in prison while the eldest received six months.
Canada is one of more than 100 countries that have now made a commitment to the Organisation for Economic Co-operation and Development and to the Global Forum on Transparency and Exchange of Information for Tax Purposes to participate in the Common Reporting Standard which is part of a global effort to increase transparency. This means that the CRA will now automatically receive information from Swiss tax authorities regarding the bank accounts of Canadian tax residents, and anyone suspected of being a Canadian tax resident, who are in Switzerland.
Deborah A. Todd