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Beware: DOJ Targeting More Than Swiss Banks

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    Various Swiss insurance products are now under the scrutiny of the United States Justice Department.  The United States has begun investigating Americans who may be using overseas insurance products to hide assets from the IRS. These investigations may mark a shift in the strategy of the U.S. government in pursuing leads relating to undisclosed offshore assets. The most recent foreign insurance product targeted by the DOJ is private placement life insurance (PPLI).

    What is private placement life insurance?

    Traditionally a legal way for U.S. citizens to defer federal income tax, PPLI’s link the value of their insurance policy to the amount of assets that are located in a Swiss bank account. The insurance company that sets up the PPLI would generallynot inquire into whether the assets in the Swiss bank account were disclosed to the home country of the policy holder or not. Problems begin to arise when the PPLI is not set up in accordance with the laws of the United States (or whatever country they may be from). The United States requires that all of the assets that are linked to the PPLI be disclosed to the IRS.

    How is the U.S. cracking down on it?

    It is no secret that the Department of Justice has spent a lot of their time over the past few years going after the Swiss banks themselves in addition to the U.S. citizens who patronize them. Now, it seems that the DOJ has widened their targeting scope to include foreign insurance providers that provide products like the common PPLI.

    This past December, Swiss Life Holding AG, a large Swiss insurance broker returned funds to hundreds of American PPLI policyholders. In fact, Swiss insurance companies with products similar to the PPLI are dropping U.S. citizens like hot potatoes. This is likely out of fear of prosecution by the Department of Justice. Unlike Swiss banks, foreign insurance companies don’t have the opportunity give up their records to the DOJ to avoid prosecution. But that doesn’t mean that the United States won’t file charges against them and procure their records anyway.

    How can you avoid prosecution?

    It’s easy to see that the insurance companies overseas are dumping their clients out of fear of prosecution. Don’t get left behind, unprotected and open to prosecution by the Department of Justice. The government established the Offshore Voluntary Disclosure Program to keep you out of jail. If you have an insurance policy like the PPLI or a similar policy funded by undeclared assets, you are at-risk. Don’t lose rest over whether you will lose your freedom.  Contact us today so you can sleep tonight.

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