U.S. tax prosecutor Downing resigns, joins Miller & Chevalier

June 4, 2012

The logo of Swiss bank UBS at the company's Zurich office. Kevin Downing, the former U.S. Department of Justice Tax Division Attorney, had investigated UBS. REUTERS/Arnd Wiegmann

The U.S. prosecutor most responsible for piercing the veil of Swiss bank secrecy has joined the law firm of Miller & Chevalier, where he will focus on defending banks and other institutions involved in tax-related matters and controversies.

Kevin Downing, who resigned last week from the U.S. Department of Justice, said he expects to advise companies rather than individuals. Miller & Chevalier, based in Washington, D.C., has an extensive concentration in tax and international litigation.

Downing, 46, had led the Justice Department’s criminal probe of the Swiss banking industry. He oversaw the deferred-prosecution agreement sealed in 2005 with UBS AG, Switzerland’s largest bank, over charges that it sold tax-evasion services through its private bank to wealthy Americans.

Downing was not a political appointee to the department but is still banned from contact with former agency colleagues for one year. In an interview on Sunday, he said he expected part of his work to involve advising financial institutions on complying with the Foreign Account Tax Compliance Act, or FATCA.

FATCA, enacted by Congress in 2010, is intended to help the U.S. Internal Revenue Service gather information about Americans’ accounts with more than $50,000 in assets in foreign banks and other institutions.

Scheduled to take effect in 2013, the new law calls for banks and financial institutions worldwide to gather the information and directly disclose it to the U.S. Internal Revenue Service (IRS) tax collection agency.

Downing joined the Justice Department in 1997, and first made his name by leading the investigation of banks, accounting firms and law firms that sold bogus tax shelters to retail investors. Under his direction, that probe culminated in a deferred-prosecution agreement with KPMG, a Big Four accounting firm, in 2005. KPMG averted indictment by admitting to criminal wrongdoing and paying a $456 million fine.

Under Downing’s direction, 11 Swiss and Swiss-style banks, including Credit Suisse AG, faced criminal investigation. Dozens of Swiss private bankers and their American clients have been indicted in recent years. Last February, under Downing’s supervision, Wegelin & Co, Switzerland’s oldest private bank, was charged with enabling wealthy Americans to evade taxes on at least $1.2 billion hidden in offshore bank accounts.

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