February 2010 Archives

Criminal Tax Problems for HSBC Customer Who Failed to File FBARs

February 22, 2010,

In the latest of a string of guilty pleas related to FBAR cases, Dr. Andrew Silva, a Virginia surgeon pled guilty to one count of conspiracy to impede the United States, and to making a false statement. Several interesting points about this tax fraud case.

• Dr. Silva inherited the Swiss bank account from his mother.
• Silva failed to file a Report of Foreign Bank Account, Form TDF 90-22.1 (FBAR), but was charged with other crimes instead.
• Silva met with a Swiss attorney who managed the Swiss Bank Account, and was advised to evade the currency reporting requirements by transporting less than $10,000 at a time to the U.S. Another case of bad advice by a Swiss attorney. Attempting to avoid the currency reporting requirements is a criminal offense known as “structuring.”
• Based upon news reports it appears that the Swiss bank account was held at HSBC . Previously the reported guilty pleas have involved funds at UBS.
• When Silva was told in late 2009 his Swiss bank account would be closed the Swiss banker refused to wire the funds, instead he was given $200,000 in hundred dollar bills which he mailed back to the US in 26 separate packages. These packages were seized by customs. More tax problems exacerbated by accepting at face value the “advice” of a Swiss banker.

For his troubles Silva could be sentenced to up to 10 years in prison, and pay a fine of up to $500,000. Silva has also agreed to forfeit the currency, and pay all of the unreported tax, interest and various penalties.

This case illustrates a classic example of making a tax problem worse by attempting to conceal what has happened. While it is dangerous to speculate without knowing all of the facts it is likely that Silva’s FBAR, and tax fraud violations came to light when he mailed the currency back to the U.S. Had he made a voluntary disclosure of the funds to the IRS, and insisted that his funds be wired to the U.S. it is likely he could have avoided his criminal tax problems.

If you have a foreign financial account call the tax litigation lawyers at Brager Tax Law Group for a consultation.

Deportation for Tax Fraud and Other Tax Crimes

February 11, 2010,

Filing a false tax return in violation of Internal Revenue Code (IRC) Section 7206 can result in deportation of a resident alien, i.e. a green card holder, according to the 9th Circuit Court of Appeals. Kawashima v. Holder (9th Cir. 2010). In a long running case Mr. Kawashima pled guilty to subscribing to a false tax return in violation of IRC Section 7206(1). His wife pled guilty to aiding and assisting in the filing of a false tax return in violation of IRC Section 7206(2).

Generally green card holders can be deported for committing an “aggravated felony.” Tax fraud or tax evasion in violation of IRC section 7201 is specifically defined by the immigration laws as an aggravated felony. Aggravated felonies also include any offence that involves fraud or deceit which exceed a loss to the victim of more than $10,000. The Kawashimas argued that since tax fraud was specifically defined as an aggravated felony Congress meant to exclude all other tax crimes including filing a false tax return. The 9th Circuit disagreed, holding that under the plain language of the statute not only was tax evasion a removable offense, but so was filing a false tax return.

This is just another reminder that the collateral consequences of a criminal tax conviction can reach far beyond the potential prison time.

If you or a loved one has been accused of civil or criminal tax evasion contact the tax lawyers at Brager Tax Law Group, a P.C. for a consultation.