Friday, October 12, 2012

Another Plea Related to Offshore Activity (10/12/12)

Dennis Duban, a Los Angeles accountant, has pled guilty to conspiracy and aiding and assisting.  The DOJ Tax Announcement is here.

Mr. Duban was the accountant who aided and assisted another client commit tax crimes.  The client, Charles Alan Pflueger, previously pled guilty.  See my blog on that plea; Plea for Defendant Charged with Tax Crimes (including FBAR) (5/30/12), here.

As explained in the press release, Mr. Duban apparently got too close to his client, so the conspiracy charge related to that.  In addition, he had has own offshore accounts that he failed to properly report.  I quote the foreign activity portions of the press release below.

Defendant:  Dennis Duban
Plea:  Conspiracy to defraud IRS (1 count) and aiding and assisting (1 count)
Banks:  Wegelin (for his client) and "New Zealand accounts" for Duban
Entities:  Yes (both for Duban and his client)
Tax Loss: at least $1 million (apparently for the client and Duban)
FBAR Penalty:  50% of high balance in his personal accounts
As described in the press release, much of the tax shenanigans was garden variety domestic tax cheating.  The following relates to offshore activity.
- Prior to the sale of the Hacienda property, Duban and others assisted the same co-defendant in creating a nominee Cook Islands trust and opening a bank account at Wegelin Bank in Switzerland in the name “Southpac Trustee International, Inc., as Trustee of the Vista Pacifica Trust.”   Proceeds of the Hacienda sale, over $14 million, were sent to the Wegelin
account.  Duban and a New York-based firm served as investment managers for the account.  Duban and the co-defendant did not timely report the co-defendant’s beneficial interest in the Swiss account on Schedule B of a Form 1040 individual income tax return or by filing a Report of Foreign Bank Account (“FBAR”). 
- Duban had an interest in other foreign bank accounts that he failed to properly report to the government.  For at least 2006 and 2007, Duban failed to report his interest in at least one New Zealand account, held in the name of Lookout Point Limited, on Schedule B of his individual income tax returns or by filing an FBAR.
I will add more as I become aware of it.

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