Posted by offshorepedia on Feb 25, 2010 in Press Releases | 0 comments
Defendant Skimmed Proceeds from his Watch Businesses to Fund Secret Accounts
WASHINGTON – Jack Barouh of Golden Beach, Fla., pleaded guilty today to filing a false tax return, the Justice Department and Internal Revenue Service (IRS) announced. Sentencing has been set for April 16, 2010, before U.S. District Judge Adalberto Jordan in Miami. The defendant remains free on a $1 million bail pending sentencing. He faces a maximum sentence of three years in prison.
According to court documents and statements made in court, Barouh admitted to filing a false tax return for 2007 in which he failed to report that he had an interest in or a signature authority over financial accounts at UBS AG, one of Switzerland’s largest bank. He also failed to report income earned on his UBS Swiss bank accounts. The UBS accounts were opened in the names of Domilou S.A., a nominee Panamanian corporation, and Similen Investments Limited, a nominee British Virgin Island corporation. For years 2002 through 2007, the tax loss associated with the Domilou and Similen accounts at UBS is approximately $736,269.
In addition to the Domilou and Similen accounts, the defendant owned and controlled several additional offshore bank accounts located at banks other than UBS, including accounts in Switzerland and Hong Kong.
According to court documents, the defendant owned and operated several businesses that manufactured and sold watches. Beginning in 1976, the defendant skimmed income from his watch businesses and deposited the proceeds into his undeclared UBS bank accounts. The defendant also deposited unreported sales commissions into the accounts.
According to court documents, beginning in 2007, the defendant attempted to withdraw his funds from Switzerland and repatriate all of the money into the United States. However, a Swiss attorney persuaded the defendant to transfer the money from Switzerland to a newly created bank account in Hong Kong in the name of a nominee Hong Kong corporation. The Swiss attorney then told the defendant to pay himself an annual “consulting fee” until all of the funds were brought into the United States. The Swiss attorney knew the defendant was not going to perform any consulting work.
As part of his plea agreement, the defendant agreed to pay a 50 percent penalty for the one year with the highest balance in his offshore accounts in order to resolve his civil liability for failing to file Reports of Foreign Bank and Financial Accounts, Forms TD F 90-22.1. The highest balance of all of the assets the defendant owned and controlled offshore was approximately $10,017,613. The defendant also must pay any additional taxes, interest and penalties he may owe.
“Today’s guilty plea is the latest success in our crackdown on illegal offshore tax evasion,” said John A. DiCicco, Acting Assistant Attorney General of the Justice Department’s Tax Division. “The Justice Department and U.S. Attorneys’ Offices will continue our investigations and prosecutions of individuals who utilize offshore accounts in Switzerland and elsewhere.”
“Skimming from one’s business and placing the assets in a secret offshore bank account is a classic example of tax evasion,” said Jeffrey H. Sloman, U.S. Attorney for the Southern District of Florida. “With tax day looming, today’s guilty plea is a reminder that those who violate the tax laws will be held accountable.”
“Hiding money in foreign bank accounts to evade paying taxes is a crime,” said Victor S. O. Song, Chief, IRS Criminal Investigation. “The IRS will continue our efforts to bring non-compliant taxpayers into the tax system either through the voluntary disclosure program or criminal prosecution.”
Acting Assistant Attorney General John DiCicco and U.S. Attorney Jeffrey H. Sloman commended the investigative efforts of the IRS agents involved in this case, as well as Senior Litigation Counsel Kevin M. Downing and Trial Attorney Mark F. Daly of the Tax Division, and Assistant U.S. Attorney Jeffrey A. Neiman, who are prosecuting the case.
In February 2009, UBS entered into a deferred prosecution agreement pursuant to which the bank admitted to helping U.S. taxpayers hide accounts from the IRS. As part of their agreement, UBS provided the United States government with the identities of, and account information for, certain United States customers of UBS’s cross-border business. Jack Barouh is the seventh former client of UBS to plead guilty to a tax felony.
U.S. citizens who have an interest in, or signature or other authority over, a financial account in a foreign country with assets in excess of $10,000 are required to disclose the existence of such account on Schedule B, Part III of their individual income tax return. Additionally, United States citizens much file a Report of Foreign Bank and Financial Accounts, or F-Bar, with the U.S. Treasury, disclosing any financial account in a foreign country with assets in excess of $10,000 for which they have a financial interest in or signature authority, or other authority over.
More information about the Justice Department’s Tax Division and its enforcement efforts is available at http://www.usdoj.gov/tax/.
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Posted by offshorepedia on Feb 16, 2010 in Press Releases | 0 comments
WASHINGTON – Dr. Andrew Silva of Sterling, Va., pleaded guilty today to conspiracy to impede the United States and to making a false statement, the Justice Department, Immigration and Customs Enforcement (ICE), U.S. Postal Inspection Service (USPIS) and the Internal Revenue Service (IRS) announced.
Sentencing has been set for May 7, 2010, before U.S. District Judge Liam O’Grady. The defendant was released on his own recognizance. He faces a maximum sentence of ten years in prison and a maximum fine of $500,000.
According to court documents, in 1997, Silva inherited an undeclared bank account from his mother at the Zurich, Switzerland, branch of one of the world’s largest international banks. The bank is headquartered in England and also has offices in Zurich, Geneva, and the Eastern District of Virginia . The account was held in the name of a sham Liechtenstein trust. In 1999, Silva met with an attorney who managed the account in Zurich, Switzerland. The Zurich attorney instructed Silva to keep the account “hush,” to not keep any records relating to the account, and to send coded letters if he wished to meet with the attorney. Further, the Zurich attorney advised Silva that if he transported or mailed less than $10,000 in U.S. currency back to the United States, he would not have to declare the funds to the U.S. government upon re-entry to the United States.
According to court documents, in September 2009, Silva was informed that the international bank was closing his undeclared Swiss account and that he had until the end of the year to travel to Switzerland to withdraw all funds. He made two trips to Zurich in October and November 2009 and met with the Zurich attorney at his office and a Swiss banker at the private wealth office of the international bank. The Zurich attorney and the Swiss banker refused to wire the money to the United States as it would leave a trail for U.S. law enforcement. Instead, they provided him with $235,000 in U.S. currency. Of that total, Silva received $200,000 in two individually wrapped “bricks” of $100,000 of sequentially numbered, new $100 bills.
According to court documents, with the assistance of the Zurich attorney, Silva mailed 26 packages containing over $200,000 in U.S. currency from Switzerland to the United States to himself and another person.
According to court documents, for the years 1997 through 2008, Silva made and subscribed false U.S. Individual Income Tax Returns, Forms 1040, that failed to report on the Schedules B attached to the returns that he had an interest in a financial account in a foreign country. Additionally, Silva failed to report the income he earned on his undeclared Swiss account on his tax returns.
According to court documents, from 1997 through 2008, Andrew Silva failed to file with the Department of the Treasury a Report of Foreign Bank and Financial Accounts on Form TD F 90-22.1 (FBAR) reporting his interest in his undeclared Swiss account that had an aggregate value of more than $10,000 at any time during a particular year.
As part of his plea agreement, Silva agreed to forfeit to the government $211,200 in U.S. currency that law enforcement officials seized from packages that Silva mailed from Switzerland to Silva’s residence in Sterling, Va.
“Today’s plea shows the continued efforts of the Justice Department to investigate and prosecute those citizens who use offshore accounts to hide income and assets,” said John A. DiCicco, Acting Assistant Attorney General of the Justice Department’s Tax Division. “American taxpayers should rest assured that those who do not file accurate tax returns and who utilize offshore accounts to hide money will be investigated, and when appropriate, prosecuted and sent to jail.”
“We are capable of thwarting offshore banking schemes because of the increased cooperation among ICE, Postal Service, and the IRS,” said Neil H. MacBride, U.S. Attorney for the Eastern District of Virginia. “The tax charges in this case came to light because agents caught Mr. Silva structuring cash to avoid reporting requirements, and that kind of coordination is making it possible for us to discover Americans who conceal their wealth overseas and make them pay for their actions.”
“Failing to report the transportation of more than $10,000 into or out of the United States is smuggling,” said Scot R. Rittenberg, Deputy Special Agent in Charge for U.S. Immigration and Customs Enforcement (ICE) in Washington, D.C. “ICE continues to work closely with it federal partners to ensure smugglers are held accountable for their crimes.”
“The U.S. Postal Inspection Service is dedicated to ensuring those that use the U.S. Postal Service to commit crimes are prosecuted to the fullest extent of the law,” said Daniel S. Cortez, Postal Inspector in Charge of the Washington Division. “We have Postal Inspectors throughout the country who work tirelessly to ensure the mail isn’t used to facilitate criminal activity.”
“At this time of year, when hard-working citizens are sitting down to prepare their tax returns, it is especially disappointing to see the overt steps some individuals will take to hide their taxable funds from the government,” said IRS Criminal Investigation Chief Victor S. O. Song. “We are determined at the IRS and Department of Justice to halt international tax evasion, and the facts outlined in today’s plea are strong indicators that we can and will find this fraudulent activity.”
Acting Assistant Attorney General John A. DiCicco commended the criminal agents from ICE, USPIS, and IRS who investigated the case, as well as Assistant U.S. Attorney Gordon Kromberg, Tax Division Senior Litigation Counsel Kevin M. Downing, and Tax Division Trial Attorneys Mark F. Daly and John E. Sullivan, who are prosecuting the case.
United States citizens and residents have an obligation to report to the Internal Revenue Service on the Schedule B of a U.S. Individual Income Tax Return, Form 1040, whether that individual had a financial interest in, or signature authority over, a financial account in a foreign country in a particular year by checking “Yes” or “No” in the appropriate box and identifying the country where the account was maintained. United States citizens and residents have an obligation to report all income earned from foreign bank accounts on the tax return.
United States citizens and residents who had a financial interest in, or signature authority over, a financial account in a foreign country with an aggregate value of more than $10,000 at any time during a particular year were required to file with the Department of the Treasury a FBAR. The FBAR for the applicable year is due by June 30 of the following year.
Individuals who physically transport, mail or ship, or cause to be physically transported, mailed, shipped or received, currency, traveler’s checks, and certain other monetary instruments in an aggregate amount exceeding $10,000 into the United States are required to file a FinCen Form 105, Report of International Transportation of Currency or Monetary Instruments, with the Bureau of Customs and Border Protection (the CMIR).
United States law prohibits individuals from structuring mailings of U.S. currency into the United States in amounts less than $10,000 if the purpose of the structuring was to evade the requirement to file a CMIR.
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FOR IMMEDIATE RELEASE
TUESDAY, FEBRUARY 16, 2010
WWW.USDOJ.GOV
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