Deferred Prosecution Agreement DPA: What is it? (Update)

Deferred Prosecution Agreement (DPA)

Deferred Prosecution Agreement (DPA)

Deferred Prosecution Agreements (DPA): Sometimes when the US government uncovers a potential fraud, they still require additional information and help from inside the organization or group subject to the investigation in order to get a better grasp on what’s going on — and to build their case. In around 2009, the United states began entering into deferred prosecution agreements with different countries other matters involving Swiss bank and financial institution fraud. One of (if not) the first DPA with a major Swiss institution was with UBS, in 2009. Following the UBS and US agreement,  several Foreign Financial Institutions throughout Switzerland and beyond entered into deferred or non-prosecution agreements with the US. Under the agreement, the institution acknowledges aiding and assisting US persons with opening accounts in Switzerland in order to avoid detection in the United states — this is a form of tax fraud as well as FinCEN Violations. 

Swiss Bank Program & Deferred Prosecution Agreements

As a result of the rampant bank and financial fraud in Switzerland and involving US persons, the United states developed a separate Swiss Bank Program to facilitate institutions throughout Switzerland with entering into these agreements. The institution acknowledges their misconduct, but avoids criminal investigations by agreeing to cooperate with the United States and provide  US account Holder information to the Department of Justice.

The US has entered into several deferred prosecution agreements with the IRS.

As provided by the DOJ:

• • The Swiss Bank Program, which was announced on August 29, 2013, provides a path for Swiss banks to resolve potential criminal liabilities in the United States.  Swiss banks eligible to enter the program were required to advise the department by Dec. 31, 2013, that they had reason to believe that they had committed tax-related criminal offenses in connection with undeclared U.S.-related accounts.  Banks already under criminal investigation related to their Swiss-banking activities and all individuals were expressly excluded from the program.

  • The Tax Division made comments on the Swiss Bank program on November 5, 2013, and June 5, 2014.

  • Under the program, banks are required to:

  • Make a complete disclosure of their cross-border activities;

  • Provide detailed information on an account-by-account basis for accounts in which U.S. taxpayers have a direct or indirect interest;

  • Cooperate in treaty requests for account information;

  • Provide detailed information as to other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed;

  • Agree to close accounts of accountholders who fail to come into compliance with U.S. reporting obligations; and

  • Pay appropriate penalties.

  • Swiss banks meeting all of the above requirements are eligible for a non-prosecution agreement.

Current List of Swiss Bank Program Agreements

Here is a list of the most recent Swiss Deferred Prosecution Agreements (the DOJ page has not been updated yet to include Rahn + Bodmer.