SWISS ASSET MANAGER PLEADS GUILTY IN CASE INVOLVING TAX EVASION

FROM:  U.S. JUSTICE DEPARTMENT
Tuesday, March 31, 2015

Swiss Asset Manager Pleads Guilty in Federal Court to Conspiring with U.S. Taxpayers to Evade Federal Income Taxes and File False Tax Returns
A Swiss citizen and former asset manager at a Swiss asset management firm pleaded guilty to conspiring with U.S. taxpayer-clients and others to help U.S. taxpayers hide millions of dollars in offshore accounts from the Internal Revenue Service (IRS), and to evade U.S. taxes on the income earned in those accounts, the Justice Department announced.

Peter Amrein, 53, a Swiss citizen, pleaded guilty before U.S. District Judge Sidney H. Stein of the Southern District of New York pursuant to a plea agreement to one count of conspiracy to defraud the IRS, to evade federal income taxes and to file false federal income tax returns.  Amrein faces a maximum sentence of five years in prison at his July 1 sentencing before Judge Stein.

“Peter Amrein’s guilty plea today is another example of individuals being held culpable, in addition to institutions, for their criminal violations of U.S. tax laws,” said U.S. Attorney Preet Bharara of the Southern District of New York.  “Regardless of the elaborate scheme you might employ, we will use all of our investigative powers to ensure that all citizens pay their fair share, and that those who assist them in evading our laws are also held responsible.”

According to the allegations in the superseding Information and the prior indictment, as well as statements made during the plea proceeding and other documents filed in federal court in Manhattan, New York:

Amrein worked as a client advisor at a Swiss bank (Swiss Bank No. 3) and, later, as an asset manager at a Swiss asset management firm (the Swiss Asset Management Firm).  In those roles, between 1998 and 2012, Amrein helped U.S. taxpayers evade taxes and hide millions of dollars in undeclared accounts at various Swiss banks, including Wegelin & Co., which was charged and pleaded guilty in the Southern District of New York for its conduct in conspiring with U.S. taxpayers to evade taxes.  Amrein, among other things, worked with an attorney based in Zurich, to establish sham foundations, which were organized under the laws of non-U.S. countries such as Liechtenstein, so that the undeclared assets of certain of Amrein’s U.S. taxpayer-clients could be maintained in the names of these foreign foundations rather than in the clients’ own names.  Amrein did so in order to help his clients conceal their ownership of these undeclared accounts from the IRS.

In 2008, it became publicly known that UBS AG (UBS) was being investigated by U.S. law enforcement for helping U.S. taxpayers maintain undeclared accounts in Switzerland.  Because of the investigation of UBS, one of the Swiss banks where Amrein had opened undeclared accounts for U.S. taxpayers (Swiss Bank No. 4) informed Amrein that it was going to close these undeclared accounts.  In order to assist his clients in continuing to maintain undeclared accounts, Amrein searched for other banks in Switzerland that, despite the public investigation of UBS, were still willing to open undeclared accounts for U.S. taxpayers.  Amrein found such a bank (Swiss Bank No. 1).  Thereafter, Amrein opened undeclared accounts for U.S. taxpayer-clients at Swiss Bank No. 1 in the name of sham foundations, and transferred the clients’ undeclared assets from Swiss Bank No. 4 to these accounts at Swiss Bank No. 1.  

For some of these clients, Amrein, with the assistance of others, helped send funds back to the United States and to other foreign jurisdictions in ways that were designed to ensure that U.S. authorities would not discover the existence of the clients’ undeclared accounts.  For instance, Amrein instructed a client advisor at Swiss Bank No. 1 (the Swiss Bank No. 1 Client Advisor) to empty one of the accounts by sending checks in amounts smaller than $9,900 to the beneficial owner of the account, i.e., the U.S. taxpayer.  On another occasion, Amrein instructed the Swiss Bank No. 1 Client Advisor to transfer the balance of one of the accounts, which was then valued at more than $2.4 million, to another account controlled by the U.S. taxpayer in Belize City, Belize.  Moreover, as late as 2011, Amrein continued to look for other Swiss banks that were still willing to open undeclared accounts for U.S. taxpayers.  For example, in June 2011, Amrein met with a client advisor at a Swiss bank (Swiss Bank No. 2), to discuss opening undeclared accounts for U.S. taxpayer-clients at Swiss Bank No. 2.        

Mr. Bharara praised the outstanding investigative work of the IRS-Criminal Investigations.  He also thanked the Department of Justice’s Tax Division for their significant assistance in the investigation.

DOCTOR RECEIVES CASH PAYMENTS FROM PATIENTS AND 46 MONTHS IN PRISON

FROM:  U.S. JUSTICE DEPARTMENT
Friday, March 6, 2015
Monmouth County, New Jersey, Doctor Sentenced to 46 Months in Prison on Structuring and Tax Charges

A Monmouth County, New Jersey, doctor was sentenced today in U.S. District Court in Trenton, New Jersey, to serve 46 months in prison for structuring cash transactions in order to avoid reporting requirements and for aiding and assisting in the filing of his own false tax returns, U.S. Attorney Paul J. Fishman of the District of New Jersey and Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division announced.

Paul DiLorenzo of Ocean Township, New Jersey, previously pleaded guilty before U.S. District Judge Freda L. Wolfson to two counts of a second superseding indictment charging him with structuring financial transactions and aiding and assisting in the filing of false tax returns.  In addition to the prison term, Judge Wolfson sentenced DiLorenzo to three years of supervised release, ordered DiLorenzo to pay restitution to the IRS of $304,293, and ordered DiLorenzo to forfeit nearly $1,000,000 in illegally derived proceeds.

According to documents filed in this case and statements made in court:

Between 2009 and June 27, 2012, DiLorenzo received more than $2 million in cash payments from his patients.  The medical office received payments exceeding $10,000 in a single day on at least 35 occasions.  Between May 28, 2009, and Nov. 2, 2011, DiLorenzo deposited $1 million in cash into banks accounts in his name and in the name of his business.  The deposits included 150 separate transactions, and all transactions but one were for less than $10,000.  Certain currency transactions of more than $10,000 trigger financial institutions to comply with Currency Transaction Report requirements.  DiLorenzo admitted that he made the deposits for less than $10,000 in order to evade the reporting requirements.

On March 29, 2011, DiLorenzo aided and assisted in the filing of a false federal income tax return for the 2010 tax year that reported gross receipts of $444,331.  His actual gross receipts, however, were more than $1 million.  In May 2012, DiLorenzo aided and assisted in the filing of a false tax return for the 2011 tax year in which he reported gross receipts of $537,236, when in fact his actual gross receipts were in excess of $800,000.

U.S. Attorney Fishman and Acting Assistant Attorney General Ciraolo commended special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, New Jersey; special agents of IRS-Criminal Investigations, under the direction of Special Agent in Charge Jonathan D. Larsen; and special agents and task force officers from the Drug Enforcement Administration’s Tactical Diversion Squad, under the direction of Special Agent in Charge Carl Kotowski, who investigated the case, and Assistant U.S. Attorney R. Joseph Gribko of the U.S. Attorney’s Office for the District of New Jersey located in Trenton, and Trial Attorney Yael Epstein of the Justice Department’s Tax Division who prosecuted the case.

CREDIT SUISSE PLEADS GUILTY TO CONSPIRACY TO AID U.S. CITIZENS WITH FILING FALSE TAX RETURNS

FROM:  U.S. JUSTICE DEPARTMENT 

Monday, May 19, 2014

Credit Suisse Pleads Guilty to Conspiracy to Aid and Assist U.S. Taxpayers in Filing False Returns

Bank Admits to Helping U.S. Taxpayers Hide Offshore Accounts from IRS; Agrees to Pay $2.6 Billion, Highest Ever Payment in a Criminal Tax Case Investigation Has Also Led to Indictment of Eight Credit Suisse Employees since 2011.

Credit Suisse AG pleaded guilty today to conspiracy to aid and assist U.S. taxpayers in filing false income tax returns and other documents with the Internal Revenue Service (IRS).  The guilty plea by the Swiss corporation is the result of a years-long investigation by U.S. law enforcement authorities that has also produced indictments of eight Credit Suisse executives since 2011; two of those individuals have pleaded guilty so far.

The plea agreement, along with agreements made with state and federal partners, provides that Credit Suisse will pay a total of $2.6 billion - $1.8 billion to the Department of Justice for the U.S. Treasury, $100 million to the Federal Reserve, and $715 million to the New York State Department of Financial Services.  The plea agreement was filed in the Eastern District of Virginia today.  Earlier this year, Credit Suisse paid approximately $196 million in disgorgement, interest and penalties to the Securities and Exchange Commission (SEC) for violating the federal securities laws by providing cross-border brokerage and investment advisory services to U.S. clients without first registering with the SEC.  That settlement with the SEC is also reflected in today’s plea agreement.  Together, these actions by U.S. law enforcement and state and federal partners appropriately punish Credit Suisse for its past behavior in these matters.

The announcement was made by Attorney General Eric H. Holder, Deputy Attorney General James M. Cole, Assistant Attorney General Kathryn Keneally for the Justice Department’s Tax Division, U.S. Attorney Dana J. Boente for the Eastern District of Virginia, and Commissioner John Koskinen of the IRS.

“This case shows that no financial institution, no matter its size or global reach, is above the law,” said Attorney General Holder.  “Credit Suisse conspired to help U.S. citizens hide assets in offshore accounts in order to evade paying taxes.  When a bank engages in misconduct this brazen, it should expect that the Justice Department will pursue criminal prosecution to the fullest extent possible, as has happened here.”

As part of the plea agreement, Credit Suisse acknowledged that, for decades prior to and through 2009, it operated an illegal cross-border banking business that knowingly and willfully aided and assisted thousands of U.S. clients in opening and maintaining undeclared accounts and concealing their offshore assets and income from the IRS.

“Credit Suisse’s guilty plea is just the latest effort by the department to slam the door shut on undeclared bank accounts, phony trusts and other foreign schemes used by U.S. taxpayers to evade taxes,” said Deputy Attorney General Cole.  “We will continue to hold to account the bankers, the brokers and other professionals in Switzerland and around the world as well as the institutions that trained and directed them to use bank secrecy laws to protect U.S. tax cheats.”

According to the statement of facts filed with the plea agreement, Credit Suisse employed a variety of means to assist U.S. clients in concealing their undeclared accounts, including by:

•          assisting clients in using sham entities to hide undeclared accounts;
•          soliciting IRS forms that falsely stated, under penalties of perjury, that the sham entities were the beneficial owners of the assets in the accounts;
•          failing to maintain in the United States records related to the accounts;
•          destroying account records sent to the United States for client review;
•          using Credit Suisse managers and employees as unregistered investment advisors on undeclared accounts;
•          facilitating withdrawals of funds from the undeclared accounts by either providing hand-delivered cash in the United States or using Credit Suisse’s correspondent bank accounts in the United States;
•          structuring transfers of funds to evade currency transaction reporting requirements; and
•          providing offshore credit and debit cards to repatriate funds in the undeclared accounts.

As part of the plea agreement, Credit Suisse further agreed to make a complete disclosure of its cross-border activities, cooperate in treaty requests for account information, provide detailed information as to other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed, and to close accounts of account holders who fail to come into compliance with U.S. reporting obligations.  Credit Suisse has also agreed to implement programs to ensure its compliance with U.S. laws, including its reporting obligations under the Foreign Account Tax Compliance Act and relevant tax treaties, in all its current and future dealings with U.S. customers.

“Today’s plea by Credit Suisse is a significant step in our global enforcement against those who would avoid their tax obligations by hiding their assets in foreign bank accounts, and those financial institutions, bankers, and other professionals who facilitate this conduct,” said Assistant Attorney General Keneally for the Tax Division. “Credit Suisse has also changed its business operations to ensure that U.S. taxpayers will no longer be able to hide their assets at Credit Suisse, and provided the government with valuable information that will further our investigations.”

“This prosecution and plea should serve notice that secret accounts and assisting the evasion of income taxes has a high cost,” said U.S. Attorney Boente.  “Concealing financial accounts from the U.S. government is not a legitimate part of wealth management or private banking services.”

“Pursuing international tax evasion is a priority area for IRS Criminal Investigation, and we will continue to follow the money here in the United States and around the world” said IRS Commissioner Koskinen.  “I want to commend the special agents in IRS-Criminal Investigation for all of their hard work in this area and the close cooperation with the Department of Justice.  Today's guilty plea is another important milestone in ongoing law enforcement efforts to investigate the use of offshore accounts to evade taxes.  People should no longer feel comfortable hiding their assets and income from the IRS.”

The Board of Governors of the Federal Reserve System is also announcing today that it has reached a resolution with Credit Suisse, by which Credit Suisse has agreed to a cease and desist order, certain remedial steps to ensure its compliance with U.S. law in its ongoing operations, and a civil monetary penalty of $100 million.  Additionally, the New York State Department of Financial Services is announcing a similar resolution by which Credit Suisse has agreed to a cease and desist order and a monetary penalty of $715 million.

* * *

On Feb. 23, 2011, a grand jury in the Eastern District of Virginia returned an indictment charging four Credit Suisse employees - Marco Parenti Adami, a former Credit Suisse manager; Emanuel Agustino, a former Credit Suisse banker; Michele Bergantino. a former Credit Suisse banker; and Roger Schaerer, Credit Suisse’s former Representative Officer in its Representative Office in New York - with conspiring with other Swiss bankers and U.S. taxpayers to defraud the United States.  On July 21, 2011, the grand jury returned a superseding indictment adding four additional defendants charged with the conspiracy to defraud the United States.  The four new defendants were: Markus Walder, the former head of North America Offshore Banking at Credit Suisse; Süsanne D. Rüegg Meier, a former Credit Suisse manager; Andreas Bachmann, a former banker at Credit Suisse Fides, a subsidiary of Credit Suisse; and Josef Dörig, a former Credit Suisse Fides employee and owner/operator of a trust company.  On March 12, 2014, Bachmann pleaded guilty to the superseding indictment in connection with his work as a banker at Credit Suisse Fides.  On April 30, 2014, Dörig pleaded guilty to conspiring to defraud the IRS in connection with his role managing offshore entities used by U.S. taxpayers to conceal their accounts at Credit Suisse.  Those pleas were accepted by U.S. District Judge Gerald Bruce Lee.  Bachmann and Dörig each face maximum penalties of five years in prison when they are sentenced on Aug. 8, 2014.

* * *

This case was prosecuted by Assistant U.S. Attorney Mark D. Lytle and Trial Attorneys Mark F. Daly and Nanette L. Davis of the Tax Division.  The case was investigated by IRS-Criminal Investigation.

The Department of Justice expressed gratitude to the Board of Governors of the Federal Reserve System, the Federal Reserve Bank of New York, the U.S. Securities and Exchange Commission, and the New York State Department of Financial Services for their significant and valuable assistance.

MAN CONVICTED OF TAX FRAUD FACES UP TO 23 YEARS IN PRISON, $1.2 MILLION IN FINES

FROM:  JUSTICE DEPARTMENT 
Wednesday, January 22, 2014
Florida Man Convicted of Tax Fraud

The Justice Department and the Internal Revenue Service (IRS) announced today that on Jan. 21, 2014, a federal jury in Palm Beach, Fla., convicted Paul F. Wrubleski, a resident of Weston, Fla., of one count of corruptly impeding the due administration of the internal revenue laws and four counts of filing false claims for tax refunds.  Wrubleski was remanded into custody yesterday.

According to court documents and the evidence presented at trial, Wrubleski had a decade-long pattern of filing false documents with the IRS.  Wrubleski impeded the IRS by filing false W-4 forms that claimed he was exempt from income tax withholding and by filing false tax returns, including four tax returns that requested over $1.5 million in federal refunds.  Wrubleski also sent obstructive letters, tax returns and other false documents to the IRS between 1999 and 2010.  In addition, the indictment alleged and the evidence proved that Wrubleski filed for bankruptcy in 2006 in order to impede IRS collection actions.

Sentencing is scheduled for April 3, 2014.  Wrubleski faces a statutory maximum potential sentence of 23 years in prison and faces a fine of up to $1.2 million.

Assistant Attorney General Kathryn Keneally of the Tax Division commended the efforts of special agents of IRS – Criminal Investigation who investigated the case, as well as Tax Division Trial Attorneys Charles Edgar Jr. and Jed Silversmith, who prosecuted the case, with local assistance from the U.S. Attorney’s Office for the Southern District of Florida.