California Jury Aquits Banker of Conspiracy to Defraud Using Offshore Bank Accounts

On Halloween day, after just four hours of deliberation, a retired senior vice president at Israeli-based Mizrahi Tefahot Bank Ltd. (MZTF) was acquitted in Los Angeles federal court on charges he helped U.S. customers conceal their assets from the Internal Revenue Service.  

Shokrollah Baravarian, 82, was acquitted of charges of conspiring to defraud the U.S. and helping Mizrahi clients prepare false tax returns. Prosecutors claimed Baravarian helped clients who opened accounts in Israel, didn’t declare them to the IRS and accessed money through loans from the Los Angeles branch.  The jury was not persuaded.  

The U.S. has been campaigning heavily to curtail offshore tax evasion. The IRS, through the US Department of Justice, has charged more than 70 taxpayers and three dozen offshore bankers, lawyers and advisers in offshore tax evasions schemes.  More than 45,000 Americans have avoided criminal prosecution by voluntarily disclosing their offshore accounts to the IRS, paying $6.5 billion in taxes, penalties and interest.   The Baravarian investigation is another blow to the US Government in its war against alleged offshore tax evasion.
 
In January, a U.S. judge in Chicago sentenced H. Ty Warner, the billionaire founder of toymaker Ty Inc. and Ty Warner Hotels & Resorts, to probation. He pleaded guilty to evading almost $5.6 million in taxes on more than $24.4 million in income from accounts with as much as $107 million. Warner faced 46 to 57 months in prison. Prosecutors are appealing.

Last year, a 79-year-old widow, Mary Estelle Curran, who evaded taxes through undeclared Swiss accounts with $43 million was sentenced to less than a minute of probation from a judge who scolded prosecutors.

On November 3, 2014,  after just 90 minutes of deliberation, federal jurors in Fort Lauderdale, Florida, found former UBS AG (UBSN) banker Raoul Weil not guilty of conspiring tohelp as many as 17,000 U.S. taxpayers hide $20 billion from the IRS.  He was arrested last year in Bologna, Italy, and waived extradition.  Weil faced five years in prison and is now a free man.

The US government is aggressively pursuing individuals and bankers for offshore tax evasion.  If you have offshore bank accounts or have been involved in a offshore vehicle, it is extremely important that you seek competent tax counsel who can help you with these matters.  Competent tax counsel can mean the difference between jail and no jail.    The Wilson Tax Law Group is composed exclusively of former IRS Attorneys and Federal Tax Prosecutors.   Our prosecution and IRS background uniquely situates us in the area of criminal tax defense.  Please contact our Newport Beach Office at 949-397-2292 for a consultation.

 wilsontaxlaw.com

California Jury Aquits Banker of Conspiracy to Defraud Using Offshore Bank Accounts

On Halloween day, after just four hours of deliberation, a retired senior vice president at Israeli-based Mizrahi Tefahot Bank Ltd. (MZTF) was acquitted in Los Angeles federal court on charges he helped U.S. customers conceal their assets from the Internal Revenue Service.  

Shokrollah Baravarian, 82, was acquitted of charges of conspiring to defraud the U.S. and helping Mizrahi clients prepare false tax returns. Prosecutors claimed Baravarian helped clients who opened accounts in Israel, didn’t declare them to the IRS and accessed money through loans from the Los Angeles branch.  The jury was not persuaded.  

The U.S. has been campaigning heavily to curtail offshore tax evasion. The IRS, through the US Department of Justice, has charged more than 70 taxpayers and three dozen offshore bankers, lawyers and advisers in offshore tax evasions schemes.  More than 45,000 Americans have avoided criminal prosecution by voluntarily disclosing their offshore accounts to the IRS, paying $6.5 billion in taxes, penalties and interest.   The Baravarian investigation is another blow to the US Government in its war against alleged offshore tax evasion.
 
In January, a U.S. judge in Chicago sentenced H. Ty Warner, the billionaire founder of toymaker Ty Inc. and Ty Warner Hotels & Resorts, to probation. He pleaded guilty to evading almost $5.6 million in taxes on more than $24.4 million in income from accounts with as much as $107 million. Warner faced 46 to 57 months in prison. Prosecutors are appealing.

Last year, a 79-year-old widow, Mary Estelle Curran, who evaded taxes through undeclared Swiss accounts with $43 million was sentenced to less than a minute of probation from a judge who scolded prosecutors.

On November 3, 2014,  after just 90 minutes of deliberation, federal jurors in Fort Lauderdale, Florida, found former UBS AG (UBSN) banker Raoul Weil not guilty of conspiring to help as many as 17,000 U.S. taxpayers hide $20 billion from the IRS.  He was arrested last year in Bologna, Italy, and waived extradition.  Weil faced five years in prison and is now a free man.

The US government is aggressively pursuing individuals and bankers for offshore tax evasion.  If you have offshore bank accounts or have been involved in a offshore vehicle, it is extremely important that you seek competent tax counsel who can help you with these matters.  Competent tax counsel can mean the difference between jail and no jail.    The Wilson Tax Law Group is composed exclusively of former IRS Attorneys and Federal Tax Prosecutors.   Our prosecution and IRS background uniquely situates us in the area of criminal tax defense.  Please contact our Newport Beach Office at 949-397-2292 for a consultation.

 wilsontaxlaw.com

IRS Seizes Assets of Legimate Business Owners without Judicial Review

 

Sen. Charles E. Grassley, R-Iowa, has expressed concerns about media reports of the IRS’s practice of prematurely seizing assets using civil asset forfeiture laws without suspicion of a crime. The Service indicated it would focus instead on areas where the funds are believed to have been acquired illegally or seizure is deemed justified by "exceptional circumstances." Grassley, ranking member of the Senate Judiciary Committee, acknowledged that, while the IRS plays a role in fighting money laundering and other criminal activity, "it has to treat business owners fairly."

 

Richard Weber, chief, IRS Criminal Investigation (IRS CI), said that, after a thorough review of the IRS’s structuring cases over the last year, "and in order to provide consistency throughout the country (between our Field Offices and the U.S. Attorney Offices) regarding our policies, IRS CI will no longer pursue the seizure and forfeiture of funds associated solely with "legal source" structuring cases unless there are exceptional circumstances justifying the seizure and forfeiture and the case has been approved at the director of Field Operations (DFO) level."

 

Weber said that, while the act of structuring, whether the funds are from a legal or illegal source, is against the law, "IRS CI special agents will use this act as an indicator that further illegal activity may be occurring." The policy update is intended to ensure that the CI continues to focus its limited investigative resources on identifying and investigating violations within its jurisdiction that closely align with CI’s mission and key priorities. "The policy involving seizure and forfeiture in "illegal source" structuring cases will remain the same," he said.

 

"When I hear about legitimate business owners’ having their money seized without judicial review, it reminds me of the taxpayer abuses that led Congress to create taxpayer bill of rights laws and the IRS restructuring commission," said Grassley in a statement. "If the pendulum has swung too far in favor of the government and against fairness for innocent people, then it’s time to reform civil asset forfeiture laws and procedures. I plan to look into the government’s use of civil forfeiture laws, including the IRS’ use, and develop potential reforms where necessary."

 

According to an IRS spokesperson, structuring is a felony under title 31 of the Bank Secrecy Act and the federal statute authorizes all law enforcement agencies to seize and forfeit—both criminally and civilly—money and property connected to the structuring activities. Seizure affidavits are reviewed by the U.S Attorney’s Office and then signed by an independent federal judge who determines that there is probable cause that the money is subject to forfeiture. Many times, the seizure of these assets will also lead to evidence of other financial crimes that were not present at the onset of the investigation.

IRS Seizes Assets of Legimate Business Owners without Judicial Review

 

Sen. Charles E. Grassley, R-Iowa, has expressed concerns about media reports of the IRS’s practice of prematurely seizing assets using civil asset forfeiture laws without suspicion of a crime. The Service indicated it would focus instead on areas where the funds are believed to have been acquired illegally or seizure is deemed justified by "exceptional circumstances." Grassley, ranking member of the Senate Judiciary Committee, acknowledged that, while the IRS plays a role in fighting money laundering and other criminal activity, "it has to treat business owners fairly."

 

Richard Weber, chief, IRS Criminal Investigation (IRS CI), said that, after a thorough review of the IRS’s structuring cases over the last year, "and in order to provide consistency throughout the country (between our Field Offices and the U.S. Attorney Offices) regarding our policies, IRS CI will no longer pursue the seizure and forfeiture of funds associated solely with "legal source" structuring cases unless there are exceptional circumstances justifying the seizure and forfeiture and the case has been approved at the director of Field Operations (DFO) level."

 

Weber said that, while the act of structuring, whether the funds are from a legal or illegal source, is against the law, "IRS CI special agents will use this act as an indicator that further illegal activity may be occurring." The policy update is intended to ensure that the CI continues to focus its limited investigative resources on identifying and investigating violations within its jurisdiction that closely align with CI’s mission and key priorities. "The policy involving seizure and forfeiture in "illegal source" structuring cases will remain the same," he said.

 

"When I hear about legitimate business owners’ having their money seized without judicial review, it reminds me of the taxpayer abuses that led Congress to create taxpayer bill of rights laws and the IRS restructuring commission," said Grassley in a statement. "If the pendulum has swung too far in favor of the government and against fairness for innocent people, then it’s time to reform civil asset forfeiture laws and procedures. I plan to look into the government’s use of civil forfeiture laws, including the IRS’ use, and develop potential reforms where necessary."

 

According to an IRS spokesperson, structuring is a felony under title 31 of the Bank Secrecy Act and the federal statute authorizes all law enforcement agencies to seize and forfeit—both criminally and civilly—money and property connected to the structuring activities. Seizure affidavits are reviewed by the U.S Attorney’s Office and then signed by an independent federal judge who determines that there is probable cause that the money is subject to forfeiture. Many times, the seizure of these assets will also lead to evidence of other financial crimes that were not present at the onset of the investigation.

"The Situation" Pleads "Not Guilty"

For those of you looking for an update on our prior post, Mike Sorrentino, star of reality show "The Jersey Shore," pleaded not guilty to all counts in a District Court in New Jersey earlier this week, on October 25.   He was released on a $250,000 bond.

The government has charged Mike Sorrentino and his brother with conspiracy to evade taxes.  In addition to allegedly filing false personal returns, Michael Sorrentino is alleged to have failed to file a return for 2011, when he allegedly received almost $2 million in income.

Daniel W. Layton, the author of this post*, is of counsel with the Wilson Tax Law Group.

*This post was previously posted on Daniel W. Layton's Tax-Attorney-OC blog and is reposted here with permission.

"The Situation" Pleads "Not Guilty"

For those of you looking for an update on our prior post, Mike Sorrentino, star of reality show "The Jersey Shore," pleaded not guilty to all counts in a District Court in New Jersey earlier this week, on October 25.   He was released on a $250,000 bond.

The government has charged Mike Sorrentino and his brother with conspiracy to evade taxes.  In addition to allegedly filing false personal returns, Michael Sorrentino is alleged to have failed to file a return for 2011, when he allegedly received almost $2 million in income.

Daniel W. Layton, the author of this post*, is of counsel with the Wilson Tax Law Group.

*This post was previously posted on Daniel W. Layton's Tax-Attorney-OC blog and is reposted here with permission.

“Jersey Shore’s” Mike ‘The Situation’ Sorrentino Indicted on Charges of Federal Tax Evasion. Pleads Not Guilty

For all those Jersey Shore fans, television personality Michael 'The Situation' Sorrentino and his brother Marc Sorrentino appeared in federal court in Newark to face an indictment alleging they did not properly pay taxes on $8.9 million in income 'The Situation' received from promotional activities, the U.S. Attorney announced. 'The Situation' and his brother, Marc, have been charged with one count of conspiracy to defraud the United States. Marc and 'The Situation' also are charged with three and two counts, respectively, of filing false tax returns for 2010 through 2012. 'The Situation' faces an additional count for allegedly failing to file a tax return for 2011, despite earning $1,995,757 that year.

According to the indictment, Michael and Marc Sorrentino filed false tax returns that incorrectly reported millions made from promotions and appearances,” said U.S. Attorney Paul J. Fishman. The brothers allegedly also claimed costly clothes and high-end cars and personal grooming as business expenses and allegedly funneled company money into personal accounts. As part of the conspiracy, the indictment alleges the brothers submitted or caused to be submitted to the IRS false documents which understated the gross receipts received by the brothers and their two companies. I suppose the IRS just does not watch enough reality TV and just doesn't understand 'The Situation' literally. Doesn't his reality TV personality require that he have high-end vehicles, silver chains and a waxed stomach at all times? Come on people.

At any rate, the conspiracy count carries a maximum potential penalty of five years in prison and a $250,000 fine; the filing false tax return counts each carry a maximum potential penalty of three years in prison and a $250,000 fine. The count charging 'The Situation' with failing to file a tax return carries a maximum potential penalty of one year in prison and a $100,000 fine.

Contact the Wilson Tax Law Group, if you should ever need assistance in a criminal tax matter at 714-463-4430. This is what we do.