Felix M. Mathis, a tax lawyer in the Swiss law firm of Froriep Renggli LLP, was indicted last month for conspiring to commit tax fraud with Andrew B. Silva, and others. The tax fraud scheme described how Mathis helped Silva set up a Lichenstein Trust, and advised him on evading the FBAR (Foreign Bank Account Report, Form TDF 90-22.1) filing requirements, by among other things making all withdrawals from his Swiss bank account in cash. The indictment sets forth spy novel like details of the conspiracy including instructions from Mathis to his clients that if they wanted to discuss their Swiss bank accounts they should send him a letter saying they “wished to meet for coffee.”
Based upon press reports, and the indictment it appears that Mathis provided similar advice to many clients. An article by Emily Babay in the Washington Examiner states that a warrant has been issued for Mathis’ arrest. It will be interesting to see if he is extradited, and if so whether he will cooperate with U.S. authorities by providing the names of his clients to the IRS in return for leniency. If that happens we can expect more prosecutions of U.S. citizens and residents for tax fraud and FBAR violations. And by the way the attorney client privilege wouldn’t apply because of the so-called crime-fraud exception which provides that there is no attorney client privilege if the services of the lawyer were sought or obtained to enable or aid anyone to commit, or plan to commit, a crime or a fraud.
This indictment is just one more reason that anyone with an offshore bank account needs to consider whether or not to make a voluntary disclosure to the IRS in the hopes of avoiding a criminal tax prosecution.
If you have an offshore bank account, and would like to learn about your options, including a voluntary disclosure, contact the tax litigation attorneys at Brager Tax Law Group, A P.C.