Superseding Indictment for Dr. Ahuja Adding Conspiracy Count (9/28/11)

Jeff Neiman posted a blog this morning in the superseding indictment for Dr. Ahuja. See Jeff Neiman, Superseding Indictment: HSBC India Customer Charged (9/28/11), here. Jeff's Blog entry has a good discussion and link to the superseding indictment, so I recommend it and will not repeat it here, other than to note that the allegations which flesh out any conspiracy charge are quite interesting. I have previously blogged the original indictment which did not include the conspiracy charge, here.
I do note the nature of conspiracy charges in this context by this cut and paste from my book (footnotes omitted):

Not surprisingly, therefore, the Government trots out the conspiracy charge whenever it can imagine more than one bad guy behind the tree – it is so easy to do. The conspiracy count allegations are framed as a cascade of allegations telling a damning story (if true and, although literally true, not misleading), but sometimes producing more heat than light. This contrasts with counts for the tax offenses which are dry, sparse, boring, and usually not even flowered up for dramatic effect. The benefits for the Government are great, and the downsides are few; after all, the prosecutors’ life and liberty are not at stake. This means, of course, that the Government’s power to tack on conspiracy charges can be abused, particularly with a weapon as potent and elastic as conspiracy. The Supreme Court has noted that:

We agree that indictments under the broad language of the general conspiracy statute must be scrutinized carefully as to each of the charged defendants because of the possibility, inherent in a criminal conspiracy charge, that its wide net may ensnare the innocent as well as the culpable.

Addendum on 9/29/11:
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Yet another plea deal for UBS Depositor (8/6/11)

Taxpayer: Michael Reiss
Bank : UBS AG; two other unidentified Swiss bank, but one is pseudonymed "Swiss Bank No. 1"
Swiss Enabler: Beda Singenberger (see blogs here)
Entities: Yes (sham foundation and apparently sham corporation)
Guilt: By Plea Agreement - False FBAR (1 count)
Maximum Incarceration Period: 5 years.
Admits: Other false FBARs and failure to file FBARs
Tax Loss: $400,000 (at least)
FBAR Penalty: $1,200,000 + (FBAR penalty; perhaps 50% of highest balance for one year).
Court: SD NY
Judge Accepting Plea: Henry B. Pitman, Magistrate Judge, USDC SDNY
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HSBC Client Indicted (6/28/11)

According to a DOJ press release today, another HSBC depositor has been indicted. The key information is as follows:

Taxpayer: Dr. Arvind Ahuja of Greendale, Wis.
Banks: HSBC in India and the Bailiwick of Jersey
Entities: ?
Charges: Tax Perjury (4 counts); Failure to File FBARs (4 counts) - years 2006 - 2009
Account Balance: $8,733,785 (2009).
Omitted Income Charged: $1.2 Million in Interest..
Court:  ED WI
Judge: ?

I  will update the spreadsheet sometime this week.

Addendum on 7/15/11:  For a report of the hearing in which he pleaded not guilty, see David Voreacos and Marie Rohde, HSBC Client Pleads Not Guilty to Filing False Returns to Tax Authorities (Bloomberg 7/14/11).

Another Criminal Charge for UBS Depositor (6/16/11)

I present for readers another charge against yet another UBS depositor. This time the case is United States v. Robert E. Greeley (N.D. CA CR 11 0374 CRB). The case is apparently assigned to Judge Charles R. Breyer, brother of Supreme Court Justice Stephen Breyer.

The charge is by information which suggests that there is a plea deal afoot. The charge is to one count of tax perjury for the year 2008. The bank is UBS. I know of little else when this blog is first posted, will add key points to this blog as I learn them.
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A Botched Foreign Account Quiet Disclosure Draws Criminal Charges (5/19/11)

The U.S. Attorney for Masschusetts filed an information against Michael F. Schiavo. The information is here. The gravamen of the misdeed recounted in the information is that Mr. Schaivo attempted a quiet disclosure for his foreign account but that, in that attempted quiet disclosure, he was less than truthful and complete. But, the information seems to say more than that. Readers can analyze the complete information at their leisure. I shall just cut and paste some of the key paragraphs that I think are relevant to professionals and students interested in this subject.

2. At all times material to this Information, HSBC Bank Bermuda Limited ("HSBC Bank Bermuda") (formerly The Bank of Bermuda, Ltd.) was a Bermuda bank headquartered in Hamilton, Bermuda. Beginning in at least in or about 2003 and continuing to at least 2008, Schiavo maintained an account at HSBC Bank Bermuda in which the balance ranged from approximately $65,000 to $150,000.
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Credit Suisse Advisor / UBS Banker Charged; DOJ Reaches Out to Him

Christos Bagios another Swiss banker has been charged with the Klein / defraud conspiracy (18 USC 371). Bagios worked serially with UBS AG, UBS Swiss Financial Advisors AG and then with Credit Suisse Private Advisors. The charge was made by complaint.  (The complaint (with affidavit) is here and is posted with the permission of Tax Analysts).  Interesting underlying facts alleged in the affidavit supporting the complaint that, if true, continues to paint a damning, even if predictable, picture for the Swiss banks. The focus of the misconduct alleged relates to Bagios' time with UBS AG and UBS Swiss Financial Advisors AG.

Bagios was arrested earlier. In the hearing on the complaint, the magistrate judge held that there was probable cause to charge Bagios and required a $500,000 corporate surety bond and $150,000 cash bond.

While at UBS, Bagios is alleged to have conspired with Renzo Gadola, who previously pled (see here) and gave incriminating information on Bagios. Kevin Downing is reported to have represented by telephone during the hearing that "Bagios and Gadola worked together in a UBS unit focused on helping American tax evaders." Also reported is that DOJ officials represented that "they had reached out to Bagios to see if he would cooperate with ongoing tax fraud investigations but said he had not responded."
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More enablers indicted

There is a new indictment out today here. The charge is one count of conspiracy. The individuals charged are:

MARCO PARENTI ADAMI,
EMANUEL AGUSTONI,
MICHELE BERGANTINO, and
ROGER SCHAERER,

The banks involved, identified by pseudonyms (I will supplement when/if I learn the bank names ["International Bank" is Credit Suisse]), are (paragraph numbers are to the paragraph numbers in the indictment):
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Another Indictment with Allegations Reputedly of Activity by HSBC and Its Bankers

The Government has obtained another indictment of one Vaibav Dahake, a U.S. depositor in an offshore financial institution. The indictment is a for a single conspiracy count.  The indictment contains the standard allegations -- a U.S. depositor, a tax haven (BVI) entity with bearer shares to hide the activity, an "international bank" (reputed to be HSBC) and a U.S. division of the international bank (this element is standard to date, but perhaps not so standard in the future with other banks who avoided overt U.S. presence). The U.S. division allegedly marketed Indian banking services to U.S. persons of Indian descent. Mr. Dahake allegedly had bank accounts in BVI and India that he did not report on an FBAR.

And, since the Government now seems to be focusing on the enablers, the indictment names 5 alleged bank related co-conspirators -- 3 U.S. bankers and 2 India bankers, all connected with the international bank.

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Another Swiss Bank Enabler is Charged with Tax / Klein Conspiracy

On December 15, 2010, another Swiss Bank enabler, one Renzo Gadola, was charged with a tax / Klein conspiracy to defeat the lawful functioning of the IRS by assisting United States clients evade U.S. taxes through the use of Swiss banks. The U.S. Attorney Press Release (containing a link to the criminal information is here).

At all relevant times, Gadola was a citizen and resident of Switzerland and a registered investments advisor with the U.S. SEC. He was employed as a private banker by UBS from 1995 through August 2008. In February 2009, he began working as an independent investment adviser under the business name of RG Investment Partner AG. For the matters alleged in the indictment, he partnered with an unindicted co-conspirator names in the indictment under the pseudonym SWISS BANKER, who is alleged to have been executive director UBS's North American business until 2003 and then an investment advisor in Switzerland after that. Gadola and SWISS BANKER assisted U.S. clients in establishing and maintaining undeclared accounts (i.e., accounts not declared to the U.S. in the tax returns or FBARs). Gadola and SWISS BANKER had numerous U.S. clients and met frequently with some of these clients in the U.S.
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Another UBS Related Defendant is Charged for Offshore Accounts

The Government has charged yet another UBS related person. The story in a nutshell is that Samuel Phineas Upham, who, I am told, is the son of Sybil Nancy Upham, previously indicted (although named in Phineas' indictment as "Family Member A"), assisted Family Member A with respect to her accounts, held through entities, by actively engaging in the cover up of those accounts and the proceeds from the accounts, even after the hammer had fallen on UBS. I am told that the son goes by the name Phineas; I use Phineas in this blog entry to distinguish him from his mother.  His mother's indictment is here.  Further, Phineas assisted Family Member A in the preparation of false returns. The charges are: (1) the ubiquitous Klein conspiracy count (Count One) and (2) aiding and assisting, Section 7206(2) for three years (2005 - 2007) (Counts Two through Four). The indictment is here.

Just a few points that I noted in reviewing the indictment (some points are redundant in part to the summary in the above paragraph, and I note that these are just allegations in the complaint and have not yet been proved):

1. The co-conspirators named in Count One are (i) Family Member A and (ii) Swiss Financial Adviser A. Swiss Financial Adviser A's background and general role in the conspiracy are described in paragraph 6.b. of the indictment. My guess is that Swiss Financial Adviser A will not come into the U.S. voluntarily anytime soon.

2. The Conspiracy Count allegations elaborate efforts to cover up, even after the hammer had fallen on UBS.

3. Sham entities were used -- a Lichtenstein Foundation and a Hong Kong corporation.

4. Phineas assisted in making large cash withdrawals and transporting the cash into the United States without submitting FINCEN Form 105 (Currency Transportation). And, in one instance, he actually completed a Customs Declaration Form falsely certifying that he was not importing cash in excess of $10,000.

5. Some of the cash was deposited into a United States bank account "multiple night deposits of cash totaling approximately $20,000 were made into accounts controlled by Family Member A."

6. In response to the U.S. actions against UBS in May 2008, Phineas and Family Member A began worrying about how they could maintain their secrecy and began moving money into a Lichtenstein Bank (Lichtenstein Bank A) with the account in the name of a sham corporation in Lichtenstein. "Unlike UBS, Liechtenstein Bank A does not have offices in the United States." The amount moved aggregated $8,554,598.

7. Phineas prepared false returns for Family Member A. In one year, Family Member A submitted the return without signing it. Phineas both prepared the returns and counseled, advised, etc., Family Member A as to the returns and reporting.

8. The tax returns for the charged years did not include the income and thus did not report the tax liability and the returns falsely answered no to the Schedule B foreign financial account question.

9. Phineas was arrested. I have not tried to sift through the charged cases to see if this is a pattern for charges where the plea is not agreed to at the time of filing or only in cases where there may be some concern about the defendant fleeing the U.S.

10. There is another instance where family members were indicted -- Harry Abrahamsen and Lucille Abrahamsen Jackson.

I have updated the spreadsheet with the information I could glean from the indictment.

Here are some links to articles:
New York Times
New York Observer

Addendum:  The foregoing discussion was updated on 12/9/10 around 2:00 pm to reflect that Phineas is the son and not Family Member A and to provide a link to the indictment of the person who is apparently Family Member A.

Request to Readers:  I am told that Sybil Nancy Upham pled guilty on 11/10/2010, and agreed to some type of $5.5 MM payment which, I presume, is the FBAR penalty at 50%.  I would appreciate receiving a copy of the plea agreement and any other documents related to the plea (including the transcript) from any reader willing to share them.  Please email anything in this regard to me at jack@tjtaxlaw.com.  Please state in the email whether the documents and / or information is for my eyes only or whether, after I strip of any identification of the provider, I can post it on this blog.  Thanks.

Swiss Lawyer Indicted for Offshore Account Activity

DOJ Tax has this press release, dated 7/15/10, announcing the indictment of a Swiss enabler: Swiss Lawyer Indicted for Helping to Hide Swiss Bank Accounts and Monies Returned to U.s. Clients. The defendant is Felix M. Mathis. The U.S. taxpayer involved is Dr. Silva. (See previous post on Dr. Silva here.)  The charges against Mathis are the defraud / Klein conspiracy and structuring the importation of currency.

More Offshore Account Charges -- Of HSBC (Reputedly) and Recorded Conversations

On April 14, 2010, the Government filed a criminal complaint in the Southern District of Florida against Mauricio Cohen Assor and Leon Cohen Levy, father and son. They are real estate developers who were either legal residents or permanent legal residents at all times and thus were subject to U.S. income tax and FBAR reporting just as other citizens and residents. The complaint itself is a bare bones Klein tax conspiracy charge. The attached affidavit of the IRS CI Special Agent agent contains the torrent of words and claims the add fluff to a conspiracy charge. There is the now expected allegations of offshore accounts and offshore entities. The bank, reputed to be HSBC rather than UBS, was involved both through New York offices and Swiss offices. The affidavit sets forth some conversations which were recorded, presumably, by the bank. This is pretty or ugly stuff, depending on perspective. We have seen in the UBS matter handwritten notes of phone calls and meetings that are ugly. Recordings are of the same genre, but do tend to nail exactly what was said rather than leaving it to the vagaries of hand written notes.

A Wave of UBS Client Indictments in SDNY

The USAO for SDNY announces a waive of UBS client charges by indictment, criminal information and complaint. The USAO SDNY press release is here. I have only been able to skim this press release and the underlying documents (many, perhaps all, of which are available on today's Tax Notes Today for those who want to get the documents fast). I will try over the weekend to get a better fix on these charges and report anything that I think is meaningful (i.e., more than just mere cumulative to the earlier reported charges).

Swiss Bank Enablers Indicted

Further ratcheting up the ante, DOJ obtained the indictment of a Swiss Banker and a Swiss Lawyer. The DOJ promo piece on the indictment is here.

The WSJ Law Blog comment (8/21/09) on this case may be viewed here.