Tax Fraud

Manhattan U.S. Attorney Preet Bharara is at it again. Now, he has indicted Wegelin & Co. – Switzerland’s oldest bank, founded in 1741 – for conspiring with U.S. taxpayers and others to hide more than $1.2 billion in secret accounts and the income these accounts generated from the IRS. This is the first time an overseas bank has been charged by the United States for facilitating tax fraud by U.S. taxpayers. 

The tax man strikes again!  The person who brought more individuals than anyone else to invest in Nevin Shapiro’s $930 million Ponzi scheme has been sentenced to a year and a day in prison – not for bringing victims to Shapiro, but for failing to report to the IRS millions of the more than $12 million in related commissions that he received.  

People hiding money in offshore bank accounts have just received a belated holiday present from the IRS: the agency has reopened the offshore voluntary disclosure program. 

The evidence that prosecutors introduce in financial fraud trials certainly is the key to whether they obtain a conviction or not. But in some cases, the evidence is a bit indirect. When can so-called “other act evidence” support a financial fraud conviction? A recent decision by the U.S. Court of Appeals for the Second Circuit sheds some light on this issue. 

We have seen a number of taxpayers with UBS bank accounts indicted for tax fraud. We also have had a neurosurgeon who was an HSBC India client indicted for conspiracy to defraud the IRS.

Remember hearing about Al Capone going to prison for a tax “problem”? Well, we thought about that again when we learned that Collette Snyder embezzled nearly $400,000 from her employer, Maple Leaf Title, but that it is a tax “problem” that may lead her to prison. 

Britian’s taxing authorities, HM Revenue & Customs (HMRC), is taking a page out of the US government’s tax fraud crackdown and will shortly begin writing to UK residents and organizations holding Swiss bank accounts with HSBC in Geneva who may not have reported all their income and gains to HMRC. 

What started out as a US government effort to prosecute US citizens who failed to report Swiss bank accounts (see, for example, here, here, and

Three federal courts have issued decisions in favor of the United States in three separate cases involving what the Department of Justice characterizes as abusive tax shelters – and all three opinions were issued on the same day, Sept. 30. 

A federal court has permanently barred John E. Rogers and two of his companies, Sugarloaf Fund LLC and Jetstream Business Limited, from promoting tax shelters that allegedly use distressed Brazilian debt to lower customers’ reported income improperly.  Judge Samuel Der-Yeghiayan of the U.S.