US calls for NKorea amnesty for sentenced American

WASHINGTON (AP) — The U.S. called Thursday for North Korea to grant amnesty and immediately release a Korean-American sentenced to 15 years' hard labor for "hostile acts" against the state.

Kenneth Bae, 44, a Washington state man described by friends as a devout Christian and a tour operator, is at least the sixth American detained in North Korea since 2009. The others eventually were deported or released without serving out their terms, some after trips to Pyongyang by prominent Americans, including former presidents Bill Clinton and Jimmy Carter.

Analysts say Bae's sentencing could be an effort by Pyongyang to win diplomatic concessions in the ongoing standoff over its nuclear program. But there was no immediate sign a high-profile envoy was about to make a clemency mission to the isolated nation which has taken an increasingly confrontational stance under its young leader Kim Jong Un.

State Department spokesman Patrick Ventrell said the U.S. was still seeking to learn the facts of Bae's case. He said the Swedish Embassy in Pyongyang, which handles consular matters there for the U.S., did not attend Tuesday's Supreme Court trial and that there hasn't been transparency in the legal proceedings.

"There's no greater priority for us than the welfare and safety of U.S. citizens abroad, and we urge the DPRK authorities to grant Mr. Bae amnesty and immediate release," Ventrell told a news conference, referencing the socialist country's formal title, the Democratic People's Republic of Korea.

North Korea has faced increasing international criticism over its weapons development. Six-nation disarmament talks involving the Koreas, the United States, Japan, China and Russia fell apart in 2009. Several rounds of U.N. sanctions have not encouraged the North to give up its small cache of nuclear devices, which Pyongyang says it must not only keep but expand to protect itself from a hostile Washington. Tensions have escalated since it conducted its third nuclear test since 2006 in February.

Pyongyang's tone has softened somewhat recently, following weeks of violent rhetoric, including threats of nuclear war and missile strikes. There have been tentative signs of interest in diplomacy, and a major source of North Korean outrage — annual U.S.-South Korean military drills — ended Tuesday.

Patrick Cronin, a senior analyst with the Washington-based Center for a New American Security, called Bae's conviction "a hasty gambit to force a direct dialogue with the United States."

"While Washington will do everything possible to spare an innocent American from years of hard labor, U.S. officials are aware that in all likelihood the North Korean regime wants a meeting to demonstrate that the United States in effect confers legitimacy on the North's nuclear-weapon-state status," Cronin said in an email.

White House spokesman Jay Carney told reporters traveling aboard Air Force One en route to Mexico that if North Korea is interested in discussion, they should live up to their obligations under the six-party talks.

"Thus far, as you know, they have flouted their obligations, engaged in provocative actions and rhetoric that brings them no closer to a situation where they can improve the lot of the North Korean people or re-enter the community of nations," Carney said.

The state-run Korean Central News Agency announcement of Bae's sentencing came just days after it reported Saturday that authorities would soon indict and try him. It referred to Bae as Pae Jun Ho, the North Korean spelling for his Korean name. The State Department had appealed Monday for his release on humanitarian grounds.

Bae, from Lynnwood, Wash., was arrested in early November in Rason, a special economic zone in North Korea's far northeastern region bordering China and Russia, state media said. The exact nature of Bae's alleged crimes has not been revealed.

"Kenneth Bae had no access to a lawyer. It is not even known what he was charged with," the human rights group Amnesty International said in a statement. "Kenneth Bae should be released, unless he is charged with an internationally recognizable criminal offense and retried by a competent, independent and impartial court."

Ventrell said the Swedish embassy's most recent access to Bae was last Friday. It has only had a handful of brief opportunities to see him since he was arrested in early November, according to U.S. officials.

Friends and colleagues say Bae was based in the Chinese border city of Dalian and traveled frequently to North Korea to feed orphans. Bae's mother in the United States did not answer calls seeking comment Thursday.

There are parallels to a case in 2009. After Pyongyang's launch of a long-range rocket and its second underground nuclear test that year, two American journalists, Laura Ling and Euna Lee, were sentenced to 12 years of hard labor after sneaking across the border from China.

They later were pardoned on humanitarian grounds and released to Clinton, who met with then-leader Kim Jong Il. U.S.-North Korea talks came later that year.

In 2011, Carter visited North Korea to win the release of imprisoned American Aijalon Gomes, who had been sentenced to eight years of hard labor for crossing illegally into the North from China.

On Thursday, Carter's press secretary, Deanna Congileo, said by email that the former president has not had an invitation to visit North Korea and has no plans to visit.

Korean-American Eddie Jun was released in 2011 after Robert King, the U.S. envoy on North Korean human rights, traveled to Pyongyang. Jun had been detained for half a year over an unspecified crime.

Jun and Gomes are also devout Christians. While the North Korean Constitution guarantees freedom of religion, in practice only sanctioned services are tolerated by the government.

U.N. and U.S. officials accuse North Korea of treating opponents brutally. Foreign nationals have told varying stories about their detentions in North Korea.

The two journalists sentenced to hard labor in 2009 stayed in a guest house instead of a labor camp due to medical concerns.

Ali Lameda, a member of Venezuela's Communist Party and a poet invited to the North in 1966 to work as a Spanish translator, said that he was detained in a damp, filthy cell without trial the following year after facing espionage allegations that he denied. He later spent six years in prison after a one-day trial, he said.

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Kim reported from Seoul. Associated Press writers Lou Kesten and Nedra Pickler in Washington contributed to this report.

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Tax cheats pony up $5.5 billion in amnesty program

WASHINGTON (AP) — The Internal Revenue Service has recouped more than $5.5 billion under a series of programs that offered reduced penalties and no jail time to people who voluntarily disclosed assets they were hiding overseas, government investigators said Friday.

In all, more than 39,000 tax cheats have come clean under the programs.

But there's more.

Government investigators suspect that thousands of other taxpayers have quietly started reporting foreign accounts without paying any penalties or interest. The number of people reporting foreign accounts to the IRS nearly doubled from 2007 to 2010, to 516,000 accounts, a report by the Government Accountability Office said.

The sharp increase suggests that some people are simply starting to report their accounts without taking part in the disclosure programs, the report said.

"IRS has detected some taxpayers with previously undisclosed offshore accounts attempting to circumvent paying the taxes, interest and penalties that would otherwise be owed," the report said. "But based on GAO reviews of IRS data, IRS may be missing attempts by other taxpayers attempting to do so."

Some taxpayers try to avoid penalties through a technique the IRS calls "quiet disclosure," in which they file amended tax returns that report offshore income from prior years. Others simply declare existing offshore accounts for the first time with their current year's tax return, the report said.

"If successful, these techniques result in lost revenue for the Treasury and undermine the offshore programs' fairness and effectiveness," the report said.

Peter Zeidenberg, a partner at the law firm DLA Piper in Washington, said it's pretty obvious that people are starting to report foreign accounts that probably existed for years.

"I don't think you get an increase like that from people just all of a sudden getting the idea I'm going to open an account in Switzerland," Zeidenberg said.

Acting IRS Commissioner Steven Miller said catching overseas tax dodgers is a top priority of the agency. In a written response to the report, he said the agency is working to improve the way it identifies people who are still trying get around the agency's disclosure programs.

The IRS has run four voluntary disclosure programs since 2003. The last three — in 2009, 2011 and 2012 — have yielded almost all of the $5.5 billion in back taxes, penalties and interest. The latest program is still open.

The agency stepped up its efforts in 2009, when Swiss banking giant UBS AG agreed to pay a $780 million fine and turn over details on thousands of accounts suspected of holding undeclared assets from American customers.

The GAO's report looked at data from the 2009 program. More than 10,000 cases from that program have been closed so far. The median account balance: $570,000.

U.S. taxpayers can hold offshore accounts for a number of legitimate reasons, the report says. They may want to diversify their investments, facilitate international business transactions or get easier access to money while living or working overseas.

But, the report notes, "some use them to illegally reduce their tax liabilities, often by not reporting the income earned on these accounts."

Taxpayers with foreign accounts totaling more than $10,000 must report them to the IRS or face stiff penalties.

The IRS has long had a policy that certain tax evaders who come forward can usually avoid jail time as long as they agree to pay back taxes, interest and hefty penalties. Drug dealers and money launderers need not apply. But if the money was earned legally, tax evaders can usually avoid criminal prosecution.

Fewer than 100 people apply for the program in a typical year, in part because the penalties can far exceed the value of the hidden account, depending on how long the account holder has evaded U.S. taxes.

The disclosure programs offered reduced penalties, but they were not a complete amnesty. In the 2009 program, most of the tax cheats were required to forfeit 20 percent of their accounts, the report said.

Miller said the agency is using information from people who have come forward to target banks and financial advisers.

The disclosure programs helped build political momentum to pass a law in 2010 that will require foreign banks to report U.S. account holders to U.S. authorities, said Ian Comisky, partner at Blank, Rome, a law firm based in Philadelphia.

If foreign governments refuse to disclose the information, U.S. banks must withhold 30 percent of certain payments to financial institutions in those countries — a big incentive for countries to cooperate.

Together, the disclosure programs and the new law offer a powerful incentive for tax dodgers to come clean, Comisky said.

"They are more scared, and they are coming in where they might have been sitting out in the cold," Comisky said. "Now they're trying to come in, even if there's a penalty to do so."

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Follow Stephen Ohlemacher on Twitter: http://twitter.com/stephenatap

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