Questions? Feedback? powered by Olark live chat software

UBS client pleads guilty for concealing more than $43 million from IRS

Criminal Exposure as a Result of Sales Tax Audits
March 26, 2014
Failure to report embezzlement / theft income tax lands Fire District Treasurer in hot water
March 26, 2014

UBS client pleads guilty for concealing more than $43 million from IRS

Date: 01/14/13

Topic: Criminal Tax Representation

In the largest individual offshore tax case since 2008, Mary Estelle Curran, 79, pled guilty to two counts of filing false tax returns in a West Palm Beach Florida Federal Court. Reportedly, Curran willfully failed to account for her offshore interests on returns from 2001 to 2007. She now faces 30 to 37 months in prison and has agreed to pay a civil penalty totaling $26.6 million in addition to restitution of $667,700 in back taxes owed.

In 2000, Curran inherited the undeclared UBS account from her late husband who was a money manager. The account was in the name of the Liechtenstein Foundation, which he created. Nathan Hochman, a former assistant attorney general who oversaw the Justice Department’s Tax Division, stated “Her husband was in complete control of their finances until he died…This was a woman without any financial background at all, none. When her husband passed away, she had no idea how much money there was at UBS.”

Upon learning of the account and her reporting obligations Curran made efforts to avoid criminal prosecution by attempting to enter the Offshore Voluntary Disclosure Program. To be eligible a taxpayer must make the appropriate disclosures before coming under investigation. Unfortunately, the Department of Justice had already secretly received her account information and began investigating. Consequently, she was denied entry and made to face criminal charges.

According to court documents, the highest closing balance of her undeclared accounts was $43 million in 2007. Previously, the largest individual case was for $42 million. By telephone, Hochman said Curran “has taken full responsibility for her actions, but there are a significant amount of mitigating circumstances in this case.” Principally, her attempt to enter the voluntary disclosure program coupled with her lack of financial sophistication will likely be factors in her sentencing. According to sources, she never used the money nor in fact needed it at all.

Assistant Attorney General Kathryn Keneally has declared, “The Justice Department continues to pursue those who hide income and assets from the IRS through the use of nominee businesses and offshore bank accounts…U.S. taxpayers who fail to come forward in the voluntary disclosure program risk prosecution and substantial fines, as this case demonstrates.” It is clear that the IRS and Department of Justice are unsympathetic in their pursuit of foreign income tax evaders. To date, U.S. prosecutors have charged more than 50 U.S. clients of foreign financial institutions and in the course of UBS’s own deferred prosecution agreement 4,000 additional client names have been turned over to U.S. authorities. If you find yourself in this or a similar position it is essential to seek the advice and counsel of a knowledgeable and experienced tax attorney.