This past Monday, Wegelin & Co, said to be Switzerland’s oldest private bank, was ordered by a federal judge in New York to pay a fine of $74 million dollars for its violation of U.S. tax laws.  For American taxpayers with undisclosed offshore accounts, this was another decidedly unhappy development in a string of unhappy developments.

Starting in 2009, when it reached a landmark agreement with UBS AG that for the first time breached Swiss bank secrecy, the government has been energetic in its pursuit of tax evaders who use foreign institutions in aid of their crimes.  This shows no sign of letting up; to the contrary, the effort seem to be accelerating.

Estimates are that this enforcement push has already netted the government billions of dollars.  There are other federal investigations pending against foreign banks, some Swiss and some not, with banking practices in countries such as India, Singapore, Israel and Hong Kong beginning to register on the government’s radar screen.

Next year, the Foreign Account Tax and Compliance Act will come on line and this will impose on foreign banks new affirmative legal obligations to disclose the identities of customers who are U.S. taxpayers.  Failure to cooperate with the FATCA protocols poses the threat of fines and other sanctions.  For those U.S. account holders who have not yet come forward and made their peace with the IRS, the outlook is not promising.