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U.S. Tax Evasion Charges Settled by Swiss Asset Manager

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    Prime Partners, a Geneva-based asset management firm has agreed to pay $5 million to the United States to settle charges for tax evasion and assisting U.S. taxpayers in opening and maintaining undeclared foreign bank accounts from 2001 to 2010.  The firm received a non-prosecution agreement as a result of its “extraordinary cooperation,” according to the Department of Justice’s (“DOJ”) press release.  Prime Partners voluntarily produced approximately 175 client files of non-compliant U.S. taxpayer-clients.


    The DOJ report states that Prime Partners acknowledged that it helped certain U.S. taxpayer clients conceal from the IRS their beneficial ownership of undeclared assets maintained in foreign bank accounts by creating merely nominal entities with no true business purpose; advising U.S. taxpayer-clients not to retain their foreign account statements; providing U.S. taxpayer clients with prepaid debit cards (funded with money from the clients’ undeclared accounts); and facilitating cash transfers in the U.S. between clients and their undeclared accounts.


    Acting Manhattan U.S. Attorney Joon H. Kim commented: “The resolution of this matter through a non-prosecution agreement, along with forfeiture and restitution, reflects the extraordinary cooperation provided by Prime Partners to our investigation. It should serve as proof that cooperation has tangible benefits. We will continue to pursue financial services firms around the world that help their clients evade U.S. taxes.”


    In early 2009, the firm voluntarily implemented a series of remedial procedures to stop assisting U.S. taxpayers in evading federal income taxes.  As part of the non-prosecution agreement, Prime Partners has agreed to forfeit $4.32 million to the United States, representing a portion of the gross revenues from services that it provided to U.S. taxpayers with undeclared foreign bank accounts from 2001 through 2010.  The firm is also required to continue to cooperate with the United States for at least three years from the date of the agreement.


    U.S. taxpayers holding foreign bank accounts must be aware of their reporting responsibilities.  Failing to file an FBAR (Report of Foreign Bank and Financial Accounts) can result in severe consequences.  If you have generated income abroad and failed to properly report it, talk to an experienced Criminal Tax Defense Attorney today.  The Tax Law Offices of David W. Klasing offer strategic guidance and effective representation on a wide variety of U.S. and international tax topics.  To schedule a reduced rate initial consultation, call (800)-681-1295 today or contact us online.


    What is an FBAR Used For? Who Must File an FBAR?

    The purpose of the FBAR filing is to inform the U.S. Treasury of the existence of the taxpayer’s relationship with the foreign account, bank or security.   One of the primary reasons of the FBAR filing is to track hidden money in foreign financial accounts used for illicit purposes (e.g., tax evasion, money laundering or terrorism).  Under IRS regulations, a taxpayer is required to file an FBAR if:


    • the United States person had a financial interest in or signature authority over at least one financial account located outside of the United States; and
    • the aggregate value of all foreign financial accounts exceeded $10,000 at any time during the calendar year reported.


    The term “United States person” includes U.S. citizens, residents and a broad range of entities created or organized in the U.S.  Trusts and estates formed under the laws of the U.S. are also included.  A person who holds a foreign financial account may have a reporting obligation even when the account produces no taxable income.  To accurately determine your own reporting obligation, contact an attorney with international tax experience.


    What Happens if I Don’t File an FBAR?

    Individuals with foreign assets and bank accounts have been under increased scrutiny in recent years. In addition to reporting foreign income, taxpayers must take the important step of filing an FBAR form in order to avoid penalties and fines.  Failing to file an FBAR is a form of tax evasion, but it also comes with its own even more severe consequences.  The willful failure to file will cost you a minimum fine of $100,000 or half the value of the foreign account, whichever is greater in addition to potential applicable criminal charges.   Even an inadvertent failure to file comes with a minimum $10,000 penalty.

    Regarding the agreement between Prime Partners and the U.S., Deputy Assistant Attorney General Goldberg said: “The message is clear to those using foreign bank accounts to engage in schemes to evade U.S. taxes – you can no longer assume your ‘secret’ accounts will remain concealed, no matter where they are located. In our ongoing investigations, we will continue to draw on information from a variety of sources and to provide substantial credit to those around the globe who provide full and timely cooperation regarding the identity of U.S. tax cheats and the phony trusts and shell companies they seek to hide behind.”

    As evidenced by Attorney Goldberg’s statement, the IRS takes its monitoring of offshore accounts quite seriously.  Those who have strayed from tax compliance on their foreign assets may want to consider making an offshore voluntary disclosure.  A voluntary disclosure offers a cooperating taxpayer protection from criminal liability and terms for resolving their civil tax and penalty obligations.

    Contact an Experienced International Criminal Tax Defense Attorney Today

    Taxpayers who have generated or maintained foreign income need to accurately report it to the IRS.  If you are required to file an FBAR and have failed to do so, contact a tax attorney to discuss your options.  An offshore voluntary disclosure may be available to help you avoid further consequences.  The professionals of the Tax Law Offices of David W. Klasing have extensive experience in the area of tax evasion defense and can provide guidance on how to return to good standing with the IRS and various state taxing authorities.  To schedule a reduced rate initial consultation with one our Tax Attorneys, CPAs or EAs, call us at (800)-681-1295 today or contact us online.


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