The US Justice Department has accused Scott Waage, a tax lawyer in San Diego, of using illegal tax schemes to withhold $10.8 million in clients’ assets that should have been paid to the IRS.
The complaint alleging Waage’s use of fraudulent tax shelters comes on the heels of another complaint filed against attorneys Charles Klink and Caleb Grodsky, who allegedly used an illegal tax scheme designed to help them avoid paying corporate taxes on income generated from the sale of their clients' business assets, according to the National Law Journal (subscription required).
According to the complaint, Waage advertised himself as a “visionary tax attorney.” He started his own law firm, now titled Strategic Law Group, which allegedly promoted illegal tax schemes that Waage used (for his own assets as well as those of his clients) to defraud the government of millions of dollars.
Friday, March 4, 2011
Friday, February 25, 2011
US pursuit of tax fraud scheme providers continues in Switzerland
Arrest warrants were issued following the Wednesday indictment of four bankers believed to have been hiding as much as $3 billion from the IRS.
Although all four bankers are employed by the Zurich-based Credit Suisse Group, the bank itself was not charged in the indictment. However, the indictment states that bank officials "knew and should have known that they were aiding and abetting U.S. customers in evading their U.S. income taxes."
The US government alleges that the fraud goes back to as far as 1953, and that in 2008, Credit Suisse was maintaining thousands of hidden accounts for US customers. Additionally, the indictment claims that that the fours bankers encouraged clients not to participate in President Obama’s tax amnesty program last year.
The AP notes that this is the first major criminal prosecution not involving Swiss-based UBS AG. In that landmark case, the UBS turned over thousands of names and paid a $780 million fine for helping US citizens conceal assets from the IRS.
Although all four bankers are employed by the Zurich-based Credit Suisse Group, the bank itself was not charged in the indictment. However, the indictment states that bank officials "knew and should have known that they were aiding and abetting U.S. customers in evading their U.S. income taxes."
The US government alleges that the fraud goes back to as far as 1953, and that in 2008, Credit Suisse was maintaining thousands of hidden accounts for US customers. Additionally, the indictment claims that that the fours bankers encouraged clients not to participate in President Obama’s tax amnesty program last year.
The AP notes that this is the first major criminal prosecution not involving Swiss-based UBS AG. In that landmark case, the UBS turned over thousands of names and paid a $780 million fine for helping US citizens conceal assets from the IRS.
Wednesday, February 23, 2011
Hunting down tax cheats in Switzerland gets easier
Switzerland has taken steps towards improving cooperation with countries seeking to pursue tax evaders hiding funds in the country.
Before the change in policy, which will take effect following Parliament’s approval, countries seeking information on tax evaders could receive administrative assistance from the Swiss government only with the full name and address of the parties of interest; the new policy will allow governments to use more varied search methods and provide less complete information.
However, the Swiss Ministry has said that it will not allow for “fishing expeditions,” whereby a government might attempt to gain information on parties that are not reasonably suspected of any wrongdoing.
The policy change comes on the heels of increased pressure from the US government to pursue tax evaders in Switzerland and other countries, including a sustained inquiry into UBS, Switzerland's biggest bank, which was recently completed.
Before the change in policy, which will take effect following Parliament’s approval, countries seeking information on tax evaders could receive administrative assistance from the Swiss government only with the full name and address of the parties of interest; the new policy will allow governments to use more varied search methods and provide less complete information.
However, the Swiss Ministry has said that it will not allow for “fishing expeditions,” whereby a government might attempt to gain information on parties that are not reasonably suspected of any wrongdoing.
The policy change comes on the heels of increased pressure from the US government to pursue tax evaders in Switzerland and other countries, including a sustained inquiry into UBS, Switzerland's biggest bank, which was recently completed.
Thursday, February 10, 2011
IRS announces new amnesty program for tax cheats
As previously indicated, the IRS has announced a new amnesty program for tax cheats who have concealed money in foreign bank accounts. The program comes on the heels of increased IRS scrutiny of foreign banking, notably UBS and Deutsch Bank AG.
The new program bears many similarities to a prior tax amnesty program which ran from March through October of 2009, and resulted in 15,000 Americans’ confession of illegal tax avoidance. The current program is less lenient, so as not to reward those who have waited, but also offers a few specific caveats for smaller accounts held by persons who can prove minimal knowledge or involvement in the offshore account. Persons to whom those specifications would have applied in the first amnesty program are invited to return now and have their fines reassessed.
According to the Wall Street Journal, the primary incentive for Americans to come forward is to avoid jail time or harsher fines. IRS Commissioner Doug Shulman stated that the program “gives people a chance to come in before we find them.” The new program is “the last, best chance for people to get back into the system,” he said. The deadline has been set for August 31, 2011.
The new program bears many similarities to a prior tax amnesty program which ran from March through October of 2009, and resulted in 15,000 Americans’ confession of illegal tax avoidance. The current program is less lenient, so as not to reward those who have waited, but also offers a few specific caveats for smaller accounts held by persons who can prove minimal knowledge or involvement in the offshore account. Persons to whom those specifications would have applied in the first amnesty program are invited to return now and have their fines reassessed.
According to the Wall Street Journal, the primary incentive for Americans to come forward is to avoid jail time or harsher fines. IRS Commissioner Doug Shulman stated that the program “gives people a chance to come in before we find them.” The new program is “the last, best chance for people to get back into the system,” he said. The deadline has been set for August 31, 2011.
Thursday, January 27, 2011
Federal indictment of tax cheat suggests possible implications for HSBC and IRS amnesty program
A recent federal indictment of a wealthy American accused of concealing money from the IRS in foreign tax shelters may signal a large-scale legal action against HSCB. Persons familiar with the indictment of Vaibhav Dahake told the New York Times that HSBC was the unidentified international bank that advised the illegal use of tax shelters.
Federal authorities are said to be considering a legal summons intended to ascertain the degree to which HSBC was actively marketing these illegal services to clients. A similar recent summons served on UBS resulted in the disclosure of several thousand client names.
The indictment of Dahake cited a number of unidentified bankers who advised him, among other things, not to file forms with the IRS and that money transferred between British Virgin Islands accounts and Indian accounts would not be monitored or noticed by US authorities.
A lawyer for Dahake said that he perceived a connection between the indictment and the impending IRS amnesty program for tax cheats. He called the indictment a “clubbed invitation” for wealthy Americans concealing money in foreign accounts to come forward, declare their money, pay their taxes, and suffer reduced fines and penalties as part of the amnesty program.
Federal authorities are said to be considering a legal summons intended to ascertain the degree to which HSBC was actively marketing these illegal services to clients. A similar recent summons served on UBS resulted in the disclosure of several thousand client names.
The indictment of Dahake cited a number of unidentified bankers who advised him, among other things, not to file forms with the IRS and that money transferred between British Virgin Islands accounts and Indian accounts would not be monitored or noticed by US authorities.
A lawyer for Dahake said that he perceived a connection between the indictment and the impending IRS amnesty program for tax cheats. He called the indictment a “clubbed invitation” for wealthy Americans concealing money in foreign accounts to come forward, declare their money, pay their taxes, and suffer reduced fines and penalties as part of the amnesty program.
Wednesday, January 26, 2011
IRS to announce second amnesty program for self-disclosing tax cheats
The IRS will soon be announcing a second amnesty program for Americans concealing accounts in foreign tax shelters; it will not be “as generous” as the last program, which 15,000 Americans opted to participate in (as well as an additional 3,000 after the October 15 deadline).
A white collar criminal defense lawyer told The New York Times that some Americans may have cheated the IRS by paying taxes on a smaller UBS account while concealing larger accounts in a smaller Swiss bank. A current focus of US prosecution is the use of regional Swiss banks, known as cantonal banks, which have been utilized successfully by tax evaders.
While the terms of the impending amnesty program have not yet been outlined in detail, they are expected to be similar to those of the previous program. However, one authority suggested to the Times that guilty parties might be better served by coming forward even prior to the program’s announcement, as ongoing investigations could reveal the offender’s identity before a voluntary disclosure, potentially voiding the possibility of amnesty.
A white collar criminal defense lawyer told The New York Times that some Americans may have cheated the IRS by paying taxes on a smaller UBS account while concealing larger accounts in a smaller Swiss bank. A current focus of US prosecution is the use of regional Swiss banks, known as cantonal banks, which have been utilized successfully by tax evaders.
While the terms of the impending amnesty program have not yet been outlined in detail, they are expected to be similar to those of the previous program. However, one authority suggested to the Times that guilty parties might be better served by coming forward even prior to the program’s announcement, as ongoing investigations could reveal the offender’s identity before a voluntary disclosure, potentially voiding the possibility of amnesty.
Tuesday, January 4, 2011
Guilty plea from Swiss banker could indicate new direction in US fight against illegal tax havens
A Swiss banker and former UBS employee’s recent guilty plea in a US tax case suggests a possible new direction and commitment for the US in its fight against illegal tax havens abroad.
Renzo Gadola was accused of recently travelling to Miami to advise a wealthy American to illegally conceal her money in a regional Swiss bank. The type of bank into which Gadola had intended to conceal the funds is known as a cantonal bank.
Attorney Brian Skarlatos, whose firm represents numerous former UBS account holders, told The Wall Street Journal that the regional cantonal banks were thought, until now, to be places where it was “safe to hide [US] money because those banks do not do business in the United States.”
Gadola’s guilty plea and cooperation with US officials could mark the beginning of further US efforts to root out illegally hidden, taxable US money in cantonal Swiss banks.
Renzo Gadola was accused of recently travelling to Miami to advise a wealthy American to illegally conceal her money in a regional Swiss bank. The type of bank into which Gadola had intended to conceal the funds is known as a cantonal bank.
Attorney Brian Skarlatos, whose firm represents numerous former UBS account holders, told The Wall Street Journal that the regional cantonal banks were thought, until now, to be places where it was “safe to hide [US] money because those banks do not do business in the United States.”
Gadola’s guilty plea and cooperation with US officials could mark the beginning of further US efforts to root out illegally hidden, taxable US money in cantonal Swiss banks.
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