Monday, April 2, 2012

Another UBS Client is Sentenced (4/2/12)

USAO D NH press release, here.  The judgment is here.

Key Facts:  From press release:  "According to documents previously filed in the matter, Hoess was aware of and understood his obligation to file FBARs in those years and report his foreign bank accounts, having previously filed FBARs in 1997, 2000 and 2001 for a bank account that he controlled in Italy."

Other Key Details:

Taxpayer:  Lothar Hoess
Sentence Date 3/20/12
Banks: UBS, Bank Ehringer, Armand von Ernst AG
Entities: Yes
Guilt: By Plea Agreement
Count(s) of Conviction: FBAR - 1 count for calendar year 2008 (but admitted failure to file for 2005-2008).
Maximum Possible Sentence:  5 years.
Sentence Imposed: 8 months home confinement
Probation: 3 years (includes time in home confinement)
Age at Sentencing:  64.
Tax Loss: Not stated (see aggregate amount immediately below).
Civil income tax with penalties and interest:  $2,033,209.00
Restitution:  $2,033,209.00
FBAR Penalty: $1,372,774 ("which represents 50 percent of the highest year-end balance in the undisclosed accounts for calendar years 2005 through 2008.").  This amount is apparently not included in restitution because it is a penalty and not a loss (or, alternatively, he may have already paid it).
Court: District of New Hampshire
Judge: McAuliffe, Steven (Wikipedia entry here.)

JAT Comment: In most of the cases, the taxpayer / defendant would not have given the Government the key proof of knowledge of the legal obligation by prior filings.  Prior filings of 1040s is also damaging evidence in a case charging failure to file income tax returns.

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