Monday, October 20, 2014

Offshore Depositor Pleads to Tax Perjury; Banks - UBS, Israeli Bank & Jersey Bank (10/20/14)

DOJ Tax announced, here, that another offshore bank depositor, Menashe Cohen, has pled guilty to one count of tax perjury, Section 7206(1). Key Excerpts
According to court documents, Menashe Cohen, an oriental carpet dealer, and his sister maintained an undeclared bank account at UBS in Switzerland that had a balance of approximately $1.3 million.  Cohen also maintained bank accounts in Israel and in Jersey, a British Crown dependency located in the Channel Islands off the coast of Normandy, France.  Although Cohen’s return for tax year 2009 reported that he had a financial interest in a bank account in Jersey, the return failed to report that he had financial interests in the accounts located in Switzerland and Israel.  In addition, Cohen’s return only reported $350 in interest income, when in fact he had received approximately $66,500 in interest income during 2009. 
In total, for tax years 2006 through 2009, Cohen failed to report approximately $170,000 in income earned from offshore bank accounts.  In addition, Cohen filed a false and fraudulent Report of Foreign Bank and Financial Accounts (FBAR) for 2009, wherein Cohen reported he had bank accounts in Israel and Jersey on the FBAR, but failed to report his financial interest in the UBS account in Switzerland. 
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Cohen faces a statutory potential maximum sentence of three years in prison and a maximum fine of $250,000 at his Jan. 26, 2015, sentencing.  In addition, Cohen has agreed to resolve his civil liability for failing to report his financial interest in the UBS account on a FBAR by paying a 50 percent civil penalty to the IRS based on the high balance of his one-half interest in the account.
JAT Comment:  Straightforward continuation of DOJ Tax's plea requirements.  However, the limitation of the FBAR penalty to his interest in the UBS account.  From the narrative, it would appear that he had FBAR and income tax delinquencies for other accounts in a period that would have been relevant to the prosecution.

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