I was reading about this case in the news - Former Executive of Loyal Bank Ltd Pleads Guilty to Conspiring to Defraud the United States by Failing to Comply with Foreign Account Tax Compliance Act
Here is an excerpt from the opening paragraph.
Earlier today in federal court in Brooklyn, Adrian Baron, the former Chief Business Officer and former Chief Executive Officer of Loyal Bank Ltd, an off-shore bank with offices in Budapest, Hungary and Saint Vincent and the Grenadines, pleaded guilty to conspiring to defraud the United States by failing to comply with the Foreign Account Tax Compliance Act (FATCA). Baron was extradited to the United States from Hungary in July 2018. The guilty plea was entered before United States District Judge Kiyo A. Matsumoto.
This whole situation strikes me as bizarre. Did Hungary really extradite one of their own citizens to face significant prison time in the United States over not reporting customer accounts to the IRS?
Based on my reading/understanding of FATCA, the United States demands that banks that wish to operate in the US must disclose information about all of their US customers. If they don't, the penalty is either a ban on access to the US banking system, large fines or both. There is no mention that foreign citizens could actually be imprisoned for not complying!
If the article includes all the relevant facts and if all the facts are accurate, this essentially means that nearly everyone in the world is subject to US law and can be prosecuted and imprisoned (assuming an extradition treaty exists) in the US for violating any of them.
Can this be? Are any facts missing here?