Another Former Swiss Executive Pleads Guilty to Tax Fraud & Conspiracy

According to DoJ, a Swiss national pleaded guilty on December 21, 2023 to conspiring to defraud the United States for his role in a scheme to help high-net-worth U.S. taxpayers conceal their income and assets in offshore accounts.

According to court documents and statements made in court, Rolf Schnellmann was the former head of Allied Finance Trust AG, a ZuJanuary come in andrich-based financial services company and a subsidiary of the Allied Finance Group in Liechtenstein. Rolf Schnellmann, Daniel Wälchli and Zurich, Switzerland-based Allied Finance Trust AG were indicted in 2020 for conspiracy to defraud the US.

From approximately 2008 to 2014, Schnellmann and his co-conspirators defrauded the IRS by concealing income and assets of high-net-worth U.S. taxpayer-clients in undeclared bank accounts at Privatbank IHAG Zurich AG (IHAG), a Swiss private bank. 

Schnellmann And His Co-Conspirators Devised And Implemented A Scheme Dubbed The “Singapore Solution” To Fraudulently Conceal The Bank Accounts Of The U.S. Taxpayer-Clients, Their Assets And Their Income From U.S. Authorities.

As part of the scheme, Schnellmann and his co-conspirators conspired to transfer more than $60 million from the U.S. taxpayer-clients’ undeclared IHAG bank accounts through a series of nominee accounts in Hong Kong and other locations before returning the funds to newly opened accounts at IHAG in the name of a Singapore-based asset-management firm that a co-conspirator helped establish. The U.S. taxpayer-clients paid large fees to IHAG and others to help them conceal their funds and assets and evade taxes. 

Schnellmann Was Indicted For Helping 3 U.S.
Taxpayer-Clients Conceal More Than $60 Million Offshore.

Schnellmann was arrested in August in Italy and extradited to the United States. He is scheduled to be sentenced on July 19, 2024, and faces a maximum penalty of five (5) years in prison, as well as a period of supervised release, restitution and monetary penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Do You Have Undeclared Income from
an Offshore Bank or Financial Advisors?

Is Your Name Being Handed Over to the IRS?

  

Want to Know if Voluntary Disclosure is Right for You? 

Contact the Tax Lawyers at 

Marini & Associates, P.A.   

for a FREE Tax Consultation contact us at:

www.TaxAid.com or www.OVDPLaw.com 
or Toll Free at 888-8TaxAid (888) 882-9243

Wealthy Targets of IRS Malta Probe Get Summons Rescission Letters?

According to Daily Tax Report the IRS has rescinded some criminal summonses from its crackdown on Malta pension plans, raising questions about whether the agency is backing off or retooling its aggressive campaign targeting the offshore tax schemes.

Three Attorneys Interviewed By Bloomberg Tax Said More Than 30 Of Their Clients Had Received A Withdrawal Letter Last Week.

The IRS declined to comment.  It’s not clear whether the withdrawal letters represent a revision to the investigation’s focus into the potentially abusive schemes. If so, it would be a striking reversal after the agency sent out hundreds of summonses in June to wealthy Americans sheltering assets in Malta and their advisors. A letter announcing the rescinded summons, obtained by Bloomberg Tax, states that 

"The Agency’s June Demand For Information Had Been 

Withdrawn And Advised, “Do Not Take Further Efforts 

To Comply With The Summons Referenced Above."

The brief letter, dated Dec. 4, specifies the agency hasn’t used any information or records collected by IRS Criminal Investigation, adding physical records will be returned and “any electronic responsive records have been destroyed.” The letter, signed by IRS Criminal Investigation special agent Brian Visalli, gives no rationale or legal basis for the agency’s decision, but advises taxpayers to retain any records responsive to the summons “as you may receive subsequent legal process for those records.”

Former IRS commissioner Charles Rettig said any adjustment to the criminal probe wouldn’t affect the current pattern of civil audits. “Withdrawing the Summons’ does not translate, at least not yet, into walking away from civilly examining the transaction,” he said in an emailed message.

Bryan Skarlatos, a partner in the New York office of Kostelanetz, characterized the action as “a recognition that the summonses were improperly issued” and a decision to “focus the criminal investigation more narrowly while allowing many of the civil audits to proceed.”

Tom Cullinan, a shareholder in the Atlanta office of Chamberlain Hrdlicka, suspects Criminal Investigation concluded it wouldn’t be able to demonstrate criminal fraud because the tax controversies boil down to technical interpretations of a treaty.

Ventry, the California law professor, said IRS shouldn’t back down if it has reasonable evidence of fraudulent conduct and to the extent the agency’s information demands might have been “over-inclusive,” the IRS could and should issue a narrower batch of summonses targeting the individuals and the conduct of greatest concern. 

Taxpayers Who Have Maltese Pension Plans Should 
Carefully Review The Underlying Legal Requirements 

And Consult Independent, Competent Advisors

Before Claiming Any Purported Tax Benefits.

Taxpayers who have already claimed the purported tax benefits of one of these four transactions on a tax return should consider taking corrective steps, such as filing an amended return and seeking independent advice. 

Where appropriate, the IRS will challenge the purported tax benefits from the transactions on this list, and the IRS may assert accuracy-related penalties ranging from 20% to 40%, or a civil fraud penalty of 75% of any underpayment of tax. 

Have a Maltese Pension Plan Problem?

     Contact the Tax Lawyers at

Marini & Associates, P.A. 

for a FREE Tax HELP Contact us at:
www.TaxAid.com or www.OVDPLaw.com
or Toll Free at 888 8TAXAID (888-882-9243)

Swiss Banque Pictet Rolls Over On U.S. Taxpayers It Helped Hide Assets In Offshore Accounts

As part of December 4, 2023’s resolution, Banque Pictet entered into a deferred prosecution agreement and agreed to pay approximately $122.9 million to the U.S. Treasury. 

Today’s Resolution Is One of a Series of Cases by The Justice Department in Connection With its Investigations Since 2008 Into Facilitation of Offshore U.S. Tax Evasion by Foreign Banks.

The case has been assigned to U.S. District Judge Edgardo Ramos for the Southern District of New York. 

“Today, Banque Pictet et Cie admitted to actively helping U.S. taxpayers use coded accounts, foreign trusts and entities, nominee beneficiaries and other deceits to conceal their income and assets abroad,” said Acting Deputy Assistant Attorney General Stuart M. Goldberg. “For this criminal conduct the bank will be paying nearly $122.9 million in restitution, disgorgement of fees and a financial penalty, and is required to fully cooperate with investigations relating to these secret accounts.”

“As it has admitted today, Banque Pictet knowingly conspired to conceal from the IRS the income generated by accounts which held more than $5.6 billion,” said U.S. Attorney Damian Williams.  Rooting out financial malfeasance remains a priority for this Office, and we encourage companies and financial institutions to come to us to report wrongdoing before we come to you.”

“This Case Should Provide A Clear Message To Others Who Try To Hide Their Assets And Income Offshore."

Our special agents are experts in following the money, and they are the best at uncovering schemes that try to defraud the U.S. tax system,” said IRS Criminal Investigation Chief Jim Lee. “Offshore tax evasion is a priority for IRS Criminal Investigation, and today’s deferred prosecution agreement with Bank Pictet collects more than $120 million owed to the U.S. government.”

From 2008 to 2014, The Pictet Group provided offshore corporation and trust formation and administration services to certain U.S. taxpayers, first through the Estate Planning and Trust Services unit and later through a wholly owned subsidiary called Rhone Trust and Fiduciary Services SA (Rhone).

As of Dec. 31, 2014, the Pictet Group’s private banking division managed or held custody of approximately $165 billion in assets under management (AUM). From 2008 to 2014, the Pictet Group served approximately 3,736 private accounts that had U.S. taxpayers as beneficial owners, whose aggregate maximum AUM, including declared assets, was approximately $20 billion.

Though Pictet Group adopted early measures to confirm that U.S. clients complied with U.S. law, from 2008 through 2014, the Pictet Group assisted certain U.S. taxpayer-clients with Pictet Group accounts in evading their U.S. tax obligations and otherwise hiding undeclared accounts[1] from the IRS.

In total, from 2008 through 2014, the Pictet Group held 1,637 U.S. Penalty Accounts with aggregate maximum AUM of approximately $5.6 billion in January 2008, on behalf of U.S. taxpayer-clients, who collectively evaded approximately $50.6 million in U.S. taxes.

The Pictet Group assisted U.S. taxpayer-clients with evading their U.S. taxes by opening and maintaining undeclared accounts for U.S. taxpayer-clients at the Pictet Group, either directly or through external asset managers. The Pictet Group also maintained accounts of certain U.S. taxpayer-clients within the Pictet Group in a manner that allowed the U.S. taxpayer-clients to further conceal their undeclared accounts from the IRS. As further detailed below, the Pictet Group used a variety of means to assist U.S. taxpayer-clients in concealing their undeclared accounts, including by:

• forming or administering offshore entities in whose name the Pictet Group opened and maintained accounts, some of which were undeclared, for U.S. taxpayer-clients; 
• opening and maintaining undeclared accounts in the names of offshore entities formed by others for U.S. taxpayer-clients;
• opening and maintaining Private Placement Life Insurance policy accounts, also called insurance wrappers, held in the name of insurance companies but beneficially owned by U.S. taxpayers and improperly managed or funded through undeclared accounts at the Pictet Group;
• transferring funds from undeclared U.S. taxpayer-client accounts to accounts nominally held by non-U.S. clients but still controlled by U.S. taxpayer-clients via fictitious donations, thus assisting U.S. taxpayer-clients in continuing to maintain undeclared funds offshore;
• providing traditional Swiss banking products such as hold-mail account services, where account-related mail is held at the bank rather than sent to the client, and coded or numbered accounts and
• accepting IRS Forms W-8BEN[3] or Pictet Group’s substitute forms that the group knew or should have known falsely stated or implied under penalty of perjury that offshore entities beneficially owned the assets in the undeclared accounts.

In addition to the payment, Banque Pictet also agrees under the deferred prosecution agreement to accept responsibility for its conduct by stipulating to the accuracy of an extensive statement of facts. Banque Pictet further agreed to refrain from all future criminal conduct, implement remedial measures and cooperate fully with further investigations into hidden bank accounts. 

Specifically, The Bank Is Required To Cooperate Fully With Ongoing Investigations And Affirmatively Disclose Any Information It May Later Uncover Regarding U.S. Accounts.

The Bank is also required to disclose information consistent with the Justice Department’s Swiss Bank Program relating to accounts closed between Jan. 1, 2008, and Dec. 31, 2022. The agreements provide no protection from criminal or civil prosecution for any individuals.

Do You Have Undeclared Income from one of 

these Offshore Banks or 

Financial Advisors?

Is Your Name Being Handed Over to the IRS?

  

Want to Know if Voluntary Disclosure is Right for You? 

Contact the Tax Lawyers at 

Marini & Associates, P.A.   

for a FREE Tax Consultation contact us at:

www.TaxAid.com or www.OVDPLaw.com 

or Toll Free at 888-8TaxAid (888) 882-9243

Swiss Turn Over More US Client Data & More Bank Accounts

The Swiss tax office notified 12 Swiss banks and one fiduciary that the U.S. is asking for legal assistance in rooting out tax cheats, according to a government bulletin made public this week. The requests cite FATCA, a U.S. banking and tax law which is applied abroad.

The requests represent vestiges of American clients at Swiss banks which haven't agreed to a data handover. FATCA is an offshoot of a decade-long U.S. hunt for money hidden offshore, including in Switzerland. 

Additionally, U.S. and Swiss officials in 2012 agreed on a program for Swiss banks to come clean on undeclared accounts and avoid prosecution. Many of the banks listed in the most recent Swiss bulletin, like Vontobel and Mirabaud, elected simply not to take part in the program.

Pictet, which is also listed in the bulletin, couldn't take part because it is still in the crosshairs of a U.S. criminal investigation for its offshore dealings with America's wealthy. Other banks include Barclays' Swiss arm and Union Bancaire Privée, both of which did participate.

The remaining banks listed are CA Indosuez, Hinduja Banque, of which didn't take part, as well as Schroder & Co, PKB Private Bank, and Zuger Kantonalbank, which did. The Swiss fiduciary listed in the legal aid is Arofin.

Fibi, a defunct bank whose assets were bought by Compagnie Bancaire Helvetique, is also on the list, as is Notenstein La Roche, which was purchased by Vontobel three years ago.

The legal aid comes in response to requests from U.S. tax investigators under FATCA, or the Foreign Account Tax Compliance Act. Switzerland and the U.S. last year finally ratified a double taxation agreement, paving the way to cooperate.

Do You Have Undeclared Income from one of 

these Offshore Banks or 

Financial Advisors?

Is Your Name Being Handed Over to the IRS?

  

Want to Know if the OVDP Program is Right for You? 

Contact the Tax Lawyers at 

Marini & Associates, P.A.   

for a FREE Tax Consultation contact us at:

www.TaxAid.com or www.OVDPLaw.com 

or Toll Free at 888-8TaxAid (888) 882-9243

TC: Taxpayer Timely Filed Petition Due on Thanksgiving Day

The Tax Court rejected the IRS' attempt to dismiss as untimely a petition that was due on Thanksgiving. The court, citing Code Sec. 7451(d), held that since the court was inaccessible on the date the petition was due, the period for filing was tolled for the period of inaccessibility plus 14 days. (Sall,  161 TC No. 13, 11/30/2023)

The IRS issued a deficiency notice to the petitioner. The IRS mailed the notice on August 26, 2022. The 90th day after August 26 was November 24, which was Thanksgiving Day (a federal holiday).

On the notice, the IRS listed the "last day" to file a petition in the Tax Court as November 25 (the day after Thanksgiving).

However, The Day After Thanksgiving Was An Administrative Holiday For The Tax Court, So The Courthouse Was Closed.

The Court's electronic filing system was operational and accessible at all relevant times.

Mr. Sall, the petitioner, mailed his petition to the Tax Court on Monday, November 28, and the court received and filed the petition on December 1, 2022. The IRS filed a motion to dismiss the petition as untimely because Mr. Sall mailed it after the November 25 deadline. 

Generally, a taxpayer must file a petition challenging a notice of deficiency within 90 days of the IRS mailing the notice. This deadline is jurisdictional and not subject to equitable tolling.

However, a filing deadline may be extended in certain circumstances. For example, the deadline for filing a petition is extended if the due date is a weekend day or a federal holiday, or if the "filing location" is inaccessible.

If the due date falls on a weekend day or a federal holiday, the due date is extended to the next business day. If the filing location is inaccessible, the due date is extended by the number of days the filing location is inaccessible plus an additional 14 days. (IRC Sec. 7451(b))

The Tax Court was closed for Thanksgiving, a federal holiday, and was also administratively closed the following day, so the filing location was inaccessible on those two days. The court received the taxpayer's petition on December 1, 2022, which was within the additional 14 days allowed by Code Sec. 7451(b).

Moreover, because the filing location was inaccessible, the availability of the court's electronic filing system was immaterial.

Have an IRS Tax Problem?

     Contact the Tax Lawyers at

Marini & Associates, P.A. 

for a FREE Tax HELP Contact us at:
www.TaxAid.com or www.OVDPLaw.com
or Toll Free at 888 8TAXAID (888-882-9243)

FinCEN Extends Beneficial Ownership Information Reports Deadline to 90 Days for New Entities

The Financial Crimes Enforcement Network (FinCEN) has extended the deadline for new entities to file their initial beneficial ownership information (BOI) reports. 

Reporting Entities Created Or Registered In 2024 Will Now Have 90 Calendar Days, Instead of 30, From The Date Of Their Creation Or Registration To File Their Initial BOI Reports. 

FinCEN has provided this extension to give new reporting entities more time to become familiar with FinCEN's guidance and educational materials and to resolve any questions that arise in the process of completing their initial BOI reports.

This extension only applies to reporting entities created or registered in 2024. 

Reporting entities created or registered in 2025 or later will have 30 calendar days after their creation or registration to file their initial BOI reports.

The BOI Reporting Deadline Hasn't Changed For Reporting Entities Created Or Registered Before 2024. Those Entities Must Still File Their Initial BOI Reports By January 1, 2025.

FinCEN will not accept BOI reports until January 1, 2024. Reports should not be submitted to FinCEN before that date.

Have A Beneficial Ownership Problem?

     Contact the Tax Lawyers at

Marini & Associates, P.A. 

for a FREE Tax HELP Contact us at:
www.TaxAid.com or www.OVDPLaw.com
or Toll Free at 888 8TAXAID (888-882-9243)