Monday, July 30, 2012
California UBS Clients Sentenced to Prison for Hiding Asssets in Secret Bank Accounts Around the WorldSean Roberts and Nadia Roberts of Tehachapi, Calif., were sentenced today before U.S. District Court Chief Judge Anthony W. Ishii in Fresno, Calif., to 12 months and 1 day in prison for hiding millions of dollars in secret offshore bank accounts in Switzerland and other banks around the world. The Roberts were also ordered to pay restitution to the Internal Revenue Service (IRS) in the amount of $709,675, and to pay more than $2.5 million to resolve their civil liability with the IRS for failing to file the required Reports of Foreign Bank and Financial Reports (FBARs).
According to court documents and statements made in court, Sean and Nadia Roberts filed false individual U.S. income tax return for 2004 through 2008 in which they failed to report that they had an interest in or a signature authority over a secret Swiss financial account at UBS, which was subsequently transferred to the Swiss branch of a Liechtenstein bank. They also failed to report several other foreign accounts in the Isle of Man, Hong Kong, New Zealand and South Africa. The Roberts failed to report any income earned on the foreign accounts and falsely deducted millions of dollars in transfers from their domestic business to the Swiss bank accounts on their corporate tax returns. The false deductions allowed the Roberts to under-report their income on their individual income tax returns. The Roberts previously operated the National Test Pilot School (NTPS) in Mojave, Calif. NTPS is a non-profit educational institute that trains test pilots from domestic and foreign aerospace industries and governments. The Roberts also owned and operated Flight Research Incorporated, which owns and maintains most of the aircraft used by NTPS.
Based on court records, in or about 1991, the Robertses opened a bank account at an Isle of Man branch of a United Kingdom bank, in the name of nominee entity Interline Trade Associates Limited. From at least 2002 through 2004, the Robertses transferred funds from their company, Flight Research Incorporated of Mississippi (FRI Mississippi), to the Interline account, and caused the transfers to be falsely deducted as interest payments on corporate income tax returns as a sham aircraft loan.
Court records also established that, in or about May 2008, the Robertses closed their Excalibur UBS account and transferred over $4.8 million to an account in Excalibur’s name at a Swiss branch of a Liechtenstein bank. This was done after the Robertses learned that UBS was under investigation by U.S. authorities and that they should leave UBS to ensure the continued secrecy of their account. In 2008, the Robertses transferred more than $1.4 million from FRI Mississippi to the Excalibur account at the Liechtenstein bank, and again caused the transfers to be falsely deducted on a corporate income tax return. Also in May 2008, the Robertses opened a bank account in the name of Modest Winner, a nominee Hong Kong entity, at the Liechtenstein bank. In 2008 and 2009, the Robertses transferred funds from another of their entities, Tisours, LLC, to that Modest Winner account. In 2009, the Robertses transferred that account to a bank in Hong Kong. The Robertses also maintained numerous undeclared foreign bank accounts in New Zealand and South Africa held in their own names. Many of the financial transactions were done with the assistance of the same operator of the Swiss wealth management and tax advisory business.
In February 2009, UBS entered into a deferred prosecution agreement under which the bank admitted to helping U.S. taxpayers hide accounts from the IRS. As part of their agreement, UBS provided the U.S. government with the identities of, and account information for, certain U.S. customers of UBS’s cross-border business, including the Robertses.
Kathryn Keneally, Assistant Attorney General of the Justice Department’s Tax Division, commended the investigative efforts of IRS - Criminal Investigation special agents, who investigated the case, and Tax Division Trial Attorneys Timothy J. Stockwell and John P. Scully, who are prosecuting the case.
