Taxpayer: Michael Clifford Francis
Plea Date: 10/1/12
Banks: UBS, HSBC (Channel Islands), Commerzbank
Entities: ? [The press release does not mention any]
Guilt: By Plea Agreement
Count(s) of Conviction: Tax Perjury (1 count) and FBAR (1 count)
Admissions: Filing false income tax return for 2006; one count of failure to file FBAR for 2006
Maximum Possible Sentence: 8 years.
Highest Amount in Account in 2006: $896,157.75'
FBAR Penalty: 50% of the high amount
Age at Plea: 50
Tax Loss: ?
Court: SD CA
Judge: George H. King (Wikipedia entry here)
Per the press release (emphasis supplied):\
Francis further admitted that in July of 2007 and January of 2008, currency deposits totaling $50,000 and $99,600, respectively were structured into his domestic bank accounts. Structured deposits involve amounts of less than $10,000 that are designed to avoid laws requiring that all cash transactions of $10,000 or more be reported to federal authorities.My preliminary comments are:
- In the past, DOJ Tax generally required only a single count plea -- either tax perjury or FBAR violation, with the defendant "picking his poison." It is not clear why this defendant was required to plead to 2 counts (I assume he was required and did not insist on two counts).
- In the past, the critical mass of charges have involved accounts with entity involvement to hide the accounts. Entity involvement was considered important to the indictments. The press release does not mention entities. But the press release does make the point that structuring was involved. Perhaps that is sufficient to warrant indictment in the absence of entities.
- Commerzbank was the bank involved in the indictment of the former IRS international examiner for conflict of interest and disclosure of return information. See my prior blog, Former IRS Agent Charged with Conflict of Interest and Disclosing Return Information Including Whistleblower Name (Federal Tax Crimes Blog 9/27/12), here. The details of that adventure have not been fully disclosed, but I would think that Commerzbank has some exposure in that adventure as well.
- It is good to know that, even though insisting on 2 counts (which will probably not affect the sentence he would have received for 1 count), the IRS is not ramping up the FBAR penalty required for the bad / indicted actors. It is still 50%,