Thursday, August 29, 2013

Another Seggerman Family Member Pleads to Charges Related to Foreign Bank Accounts (8/29/13)

Yesterday, Henry Seggerman pled guilty tax charges (noted below).  The USAO SDNY press release is here.  Seggerman is one of several siblings in a prominent (perhaps the same as wealthy) family who have been charged and pled guilty.  In my spreadsheet, I have previously missed the charges and pleas of the other family members except Suzanne Seggerman.  I have now added the others to the spreadsheet and will be posting the spreadsheet later this week.

I have not yet obtained the plea agreement but will try to track it down and post updates as appropriate.

Here are the key data:

Taxpayer: Henry Seggerman
Charges:  Conspiracy (1), Tax Perjury (1), Aiding and Assisting (1)
Maximum Possible Sentence:  11 years.
Tax Loss:  ?
FBAR Penalty: ?
Bank: ?
Entities:  Yes
Court:  SDNY
Judge:  Alvin K. Hellerstein (Wikipedia entry here)

Key excerpts from the USAO SDNY press releasae:
Manhattan U.S. Attorney Preet Bharara said: “Henry Seggerman and three of his siblings inherited and continued a family tax fraud scheme. Now, four members of this family stand convicted of tax crimes. We will continue to aggressively investigate and prosecute U.S. taxpayers, and those that assist them, in evading their obligations by hiding money in secret offshore accounts.” 
SEGGERMAN was the son of a prominent New York businessman (“the Businessman”) who, upon passing away in May 2001, left an estate valued in excess of $24 million, more than half of which was maintained in secret and undeclared foreign bank accounts. Working with a Swiss lawyer and others, the Businessman arranged for over $12 million in the undeclared accounts to be left to his surviving spouse and five of his children, including SEGGERMAN. As a result of the successful implementation of that plan, and to hide the undeclared funds from the IRS, SEGGERMAN, who, together with three of his siblings, was an executor of his father’s estate, signed a tax return for his father’s estate that falsely under-reported the gross assets of the Businessman’s estate. In particular, the estate tax return fraudulently failed to report over $5 million left to the Businessman’s wife and over $7.5 million to be split among five of his children.
In addition, the Swiss lawyer thereafter assisted SEGGERMAN’s siblings, including Suzanne Seggerman, Yvonne Seggerman, and Edmund Seggerman, in setting up undeclared Swiss bank accounts to hold the money left to them by their father. SEGGERMAN assisted his brother in surreptitiously transferring funds from the brother’s Swiss account to a bank account for a foundation controlled by SEGGERMAN, who thereafter filtered the funds to the brother in the United States, labeling the transfer as “loans.”
Suzanne Seggerman, Yvonne Seggerman, and Edmund Seggerman each previously pled guilty to one count of conspiracy to defraud the United States, and two counts of subscribing to false and fraudulent tax returns. Each faces a maximum sentence of 11 years in prison. Suzanne Seggerman, 51, of New York, New York, pled guilty before U.S. District Judge Kevin Thomas Duffy on October 14, 2010 and awaits sentencing. Yvonne Seggerman, 58, of Cumberland, Rhode Island, pled guilty before U.S. District Judge Paul A. Engelmayer on March 14, 2013 and awaits sentencing. Edmund Seggerman, 50, of Washington, D.C., pled guilty before U.S. District Judge Thomas P. Griesa on March 21, 2013 and awaits sentencing.
The Seggermans are expected to be key witnesses in the trial of Michael Little, about whom we have written before (and will write again, I am sure).  See British Lawyer Charged in Swiss Bank Mess Related to UBS Account (Federal Tax Crimes Blog 5/11/12), here.

For other news articles on Henry Seggerman's plea, see:
  • Christie Smythe, Seggerman Pleads Guilty to Conspiracy in Tax Evasion Case (Bloomberg 8/28/13), here.
  • Robert W. Wood, U.S. And Swiss Reach Deal On Evaders---More Guilty Pleas Over Offshore Accounts (Forbes 8/29/13), here.

For prior articles, see:
  • Benjamin Weiser, Family Told How to Hide Inheritance, U.S. Claims (NYT 5/11/12), here.
  • Bob Van Voris, Edmund Seggerman to Plead Guilty in Tax Case, U.S. Says (Bloomberg 3/21/13), here.
Wikipedia on Suzanne Seggermann, here.

JAT Notes:
  1. The tax loss is clearly in the millions, producing (wild estimate) at least a BOL of 24 (consideirng relevant conduct).  Obviously the family members will qualify for 5K1 and even then the resulting sentence will likely be more than the judge will impose (using Booker discretion).  Still, the circumstances of the conduct of the Seggerman family members will test whether offshore account defendants are treated differently for sentencing purposes.

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