Raoul Weil has been arrested in Italy on U.S. tax charges. He was a high executive of UBS and is accused of participating in UBS' abetting its clients' evasion of U.S. taxes. This raises two reactions:
1. Why did he go on vacation in a country that extradites to the United States? It seems careless. Of course, he may know something we don't: it will be interesting to see whether the Italians actually end up extraditing him.
2. The only true immunity from prosecution at this point lies in being a high executive of a U.S. bank.
Presumably the U.S. government has a full set of cooperating witnesses lined up to testify against Mr. Weil, but there may be significant questions about U.S. legal liability for conduct taking place elsewhere. It is not clear that a Swiss banker, operating in Switzerland, has an obligation to help the United States enforce its tax laws.
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