Monday, March 14, 2011

Another Plea for Taxpayer with UBS & Credit Suisse Accounts

There is another plea for a taxpayer. The DOJ Tax press release is here. The key facts (which may be supplemented as I learn additional key facts) are:

Taxpayer: Jeffrey Chatfield
Banks : UBS AG (actually UBS Bahamas Ltd.) & Credit Suisse
Entities: Yes
Guilt: By Plea Agreement - one count of tax perjury
FBAR penalty:
Court: SD CA
Judge: Anello, Michael N.

I will fill in more facts when I get them and will then update the spreadsheet.

Addendum 3/16/11:

I downloaded the judgment from Pacer here.  Other documents such as the plea agreement that might offer key information not evident from DOJ's press release were not available.  There are some provisions in the judgment that might be worthy of note, although they are too cryptic for me to put in context.  These are:

1.  Restitution  of $2,000 is ordered and relates to three tax years (2002-2004).  Since restitution is not allowed for tax crimes, I presume that this was restitution pursuant to the plea agreement because restitution is not stated to be a condition of supervised release.  The judgment specifically says that the restitution is to be "credited to tax."

2.  There is a special condition for supervised release that (1) Chatfield cooperate with the IRS in determining his tax liability and in paying unpaid tax, penalties and interest and (2) Chatfield "shall pay a civil liability to the IRS in the amount of $96,268.50.  The judgment does not say what this penalty is but I presume that it is either the FBAR penalty or an agreed "in lieu of " FBAR penalty.  Assuming that to be the case and assuming the IRS did the standard 50% of high balance from 2003 forward, presumably the high balance was just less than $200,000 (although there was almost $1,000,000 in 2000 per the press release).

3.  The Court makes a finding, apparently for the $2,000 of restitution, that "the defendant does not have the ability to pay interest" but does not check which of the two boxes apply.

I will post more as I get information that may be helpful in putting this case in the context of the Government;s tax enforcement initiatives.


  1. Interesting that this is another plea deal that led to probation rather than incarceration. Contrast this to Mauricio Cohen Assor and Leon Cohen-Levy who would not plea and instead went to trial, and received ten year jail sentences.

    Also, the Chatfield case is yet another prosecution that involved foreign entities (corporations, trust, etc.) that were utilized in order to obscure the beneficial ownership of the undeclared foreign account. These intermediary entities seem to make the IRS and DOJ particularly angry, although of course non-compliant foreign accounts that do not utilize such entities are also vulnerable to investigation and prosecution.

  2. Wow! 96,000 settled his civil liabilities with the IRS. Seems pretty low for an account that held 900,000 at a point. The case also involved multiple entities. Why is there not a 50% FBAR penalty like other cases of this nature? Do you think the account balance diminished substantially and the IRS agreed to look back to only certain years?

  3. Or perhaps information was traded. This was a pretty sophisticated scheme and it involved CS, so DOJ might have been happy to stick a talon in CS?

  4. I think there is a lot more to this story than the information I have seen indicates. I went to Pacer to retrieve the publicly available documents, but some of the key documents (e.g., the plea agreement) are not publicly available.

    I did get the judgment which I will summarize and post in an addendum to the blog.

    Thanks for your comments.


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