United States Petitions Court for Leave to Issue “John Doe” Summons to HSBC

Apr 12, 2011   

On April 7, 2011, the U.S. Department of Justice “ Tax Division, filed a petition in U.S. District Court for the Northern District of California, San Francisco Division, for leave to issue a “John Doe” summons to HSBC. The case number is CV-11-1686-LB. On the same day, the Department of Justice issued a press release, available here.

the government alleges that since at least 2002, thousands of U.S. taxpayers of Indian origin have opened and maintained accounts at HSBC. The government further alleges that HSBC used representative offices in New York and California to solicit and maintain those accounts, and that HSBC assured its customers that the accounts in India would not be disclosed to the IRS.

The press release states that although HSBC India closed those offices in June 2010, its clients may still access their accounts at HSBC India from the United States. According to the petition documents, HSBC clients have told IRS investigators that HSBC representatives in the United States assured the clients that they could invest in accounts at HSBC India without paying U.S. income tax on interest earned on the accounts and that HSBC would not report the income earned on the HSBC India accounts to the IRS.

The governments attempt to obtain documents from HSBC comes in the wake of recent activity where grand jury subpoenas have been issued to taxpayers to produce their documents of the foreign bank accounts as required by the Bank Secrecy Act and the federal regulations issued by the Department of the Treasury.

The attorneys at Fuerst Ittleman, PL have been actively litigating against the Department of Justice in response to recent grand jury subpoenas. Additionally, the attorneys at Fuerst Ittleman, PL have extensive experience dealing with both the IRS and the Department of Justice in regards to undisclosed foreign bank accounts, civil and criminal tax evasion, and voluntary disclosures. You can reach an attorney by emailing: contact@fidjlaw.com.