Stamping Out Tax Fraud
Using Offshore Banks

For years, tax cheats have set up offshore bank accounts, thinking it would keep them out of reach of U.S. tax law enforcers.  John McDougal, Kappa Gamma 173, Fairmont ‘71, is an Internal Revenue Service (IRS) special trial attorney who has tax evaders thinking again, unraveling complicated international financial networks and recovering millions of dollars in the process.

McDougal (pictured above with his team) is an innovative thinker whose team took a simple idea and transformed it into a campaign that challenged the seemingly impenetrable veil of secrecy around offshore accounts and gradually raised the risks of hiding money offshore to the point where large numbers of offshore tax evaders are now turning themselves in. This relentless campaign has most recently contributed to forcing a recalcitrant foreign bank to reveal the identities of hundreds of offshore account holders. Offshore tax evasion, a 2008 Senate report said, costs the U.S. Treasury $100 billion per year.

McDougal’s team’s approach was simple: If foreign tax havens were not forthcoming with information about their depositors, perhaps going after U.S. companies that process financial transactions for Americans with foreign bank accounts would yield results.