Just one comment, in many of these situations where there are not entities involved but only directly owned Swiss accounts, there was often no discussion between the U.S. depositor and the Swiss banker about U.S. tax. At best or worst (depending upon perspective), there was an unspoked understanding that that was the game being played. But, as the situation in this plea indicates, at some point the Swiss enablers moved beyond unspoken understandings.
I have received the plea and statement of facts and include some of the items I think interested below:
1. The parties agree to Sentencing Guideline components as follows: (a) tax loss between $400,000 and $1,000,000 (actually stipulated to be $736,269, but the bracketed amounts are what is important for the guidelines calculations); (b) the crime involves sophisticated means, and (c) Government agrees to the standard acceptance of responsibility downward adjustments (2 or 3 as appropriate, which, of course, 3 is appropriate). The Guideline range I calculate on these components it is 46-57 months, which exceeds the maximum 3 year sentence for the crime of conviction (tax perjury). The Government does agree "to recommend that the defendant be sentenced at the low end of the guideline range, as that range is determined by the court," provided only that the defendant cooperates and does not misbehave before sentencing. I don't know what exactly that gets for the defendant other than that the Government signals to the court that the defendant may be a nice guy and perhaps that a downward variance might be appropriate. Of course, the courts have uniformly sentenced lower other offshore account recipients by Booker downward variance, so presumably that is the hope of the defendant.
2. Defendant is required to cooperate in determination of his liability for taxes, penalties and interest. Further, "[n]othing in this agreement shall limit the IRS in its civil determination, assessment, and collection of any taxes, interest, and/or penalties that the defendant may owe." I wonder if the IRS will require the defendant to go to years earlier than 2002. (I doubt it, so that to that extent, the defendant has profited from his offshore caper.) Of course, as noted above, he does cap his FBAR exposure.
3. The defendant began the skimming and depositing in offshore banks since approximately 1976, so he has presumably achieved a substantial tax savings over the years and all of this would easily fall in the concept of relevant conduct that should have entered the tax loss for guidelines purposes. Yet, it appears that, as usual, the Government and the courts will put blinders on for years earlier than 2002. I guess the Government is here to help.
4. The defendant used offshore enablers who are referred to a Swiss Money Managers #1 and #2 and Swiss Attorney #1. (Alright, technically, in the Statement of Facts, the first is sometimes referred to as Swiss Money Manger #1; but I assume that is a typo; and the reference to Swiss Attorney #1 without any further reference to #2, suggests that there may have been a #2 whose name dropped out in the negotiation process.)
5. Now, we have something really juicy (not sex, but almost as juicy). The Statement includes the following:
Between November 2003 and March 2004, SWISS MONEY MANGER #1 misappropriated more than $5 million from the Domilou account by transferring the funds to a UBS account in the name of another Panamanian corporation which was owned by SWISS MONEY MANAGER #1 and his wife.Is there no honor among thieves?
6. I wonder if the defendant got the benefit of an unclaimed deduction in the guidelines calculation of tax loss for the money stolen from him. As readers have noticed before in my blogs, there is some variance (if that is a fair word) among the circuits as to whether unclaimed deductions can enter the guidelines calculations.
7. This is pretty juicy also:
Beginning in late 2007, the defendant asked SWISS ATTORNEY #1 and SWISS MONEY MANAGER #2 about making a voluntary disclosure and reporting his offshore assets to the Internal Revenue Service. On several occasions, the defendant was discouraged from doing so by SWISS ATTORNEY #1 and MONEY MANAGER #2. MONEY MANAGER #2 told the defendant that it would involve too much paper work to make a voluntary disclosure. SWISS ATTORNEY #1 told the defendant that it was not necessary to consult with a United States tax attorney because a Swiss attorney typically initiates a voluntary disclosure, that he was not on the list of people being reported by UBS, that the best thing to do was to move the money from UBS to another financial institution, and that, if he did not want to receive the "consulting fees" from Amery Investments Ltd., he could purchase a life insurance policy in order to repatriate the money to the United States after his death.