Tax Fraud

A federal court has permanently barred Tracy L. Sunderlage, Linda Sunderlage and four companies from operating an alleged scheme to help high-income individuals attempt to avoid income taxes by funneling money through purported employee benefit plans, according to the Justice Department. Judge John W. Darrah of the U.S.

As we get closer and closer to Tax Filing Day, it turns out that there are more and more financial frauds attempting to separate people from their hard earned money through tax refund scams.  

In 2010, Congress enacted the Foreign Account Tax Compliance Act (FATCA), which introduced reporting requirements for foreign financial institutions with respect to certain bank accounts of U.S. taxpayers. One of the goals of the law was to make it more difficult for U.S. taxpayers to avoid paying U.S. taxes by stashing money in overseas bank accounts. 

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.