Another Plea to Offshore Account Tax Crimes (10/7/16)

DOJ Tax announced here a new guilty plea, here, to tax obstruction, § 7206(1), a three year felony.  Excerpts:

Bernhard Rumbold, a resident of Clarkston, Michigan, and owner of several mining-related businesses in Michigan and Ontario, Canada, pleaded guilty to filing a false amended 2008 individual income tax return.  According to the information and the plea agreement, in approximately November 2004, Rumbold transferred more than approximately $2.6 million from his parents’ trust account, which he managed, into a bank account at Credit Suisse Bank AG in Switzerland.  Rumbold arranged for the Credit Suisse bank account to be in the name of Wisdom City Limited, a Hong Kong company whose sole purpose was to be the named account holder on foreign bank accounts.  Rumbold, who was the beneficial owner of the account, transferred control of the account to a relative in December 2008.    

On his 2006 through 2008 individual income tax returns, Rumbold falsely stated that he had no interest in a foreign financial account, and failed to report the interest, dividends and capital gains generated by the Swiss bank account as income.  In October 2010, Rumbold signed and filed an amended 2008 individual income tax return in which he again failed to report the interest, dividends and capital gains generated by the Swiss bank account as income. 

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The plea agreement requires Rumbold to pay restitution for his unpaid tax liabilities for the years 2006 through 2008.  [There is no indication that he will be required to pay an FBAR penalty.]

I note in this regard that the DOJ Tax's advertised policies for plea deals are (DOJ Tax CTM 5.01[1] Offense of Conviction — The Major Count Policy, here):  (i) "tax evasion counts (26 U.S.C. § 7201) take priority over other substantive tax counts;" and "the count charged in the indictment or information that carries the longest prison sentence is the major count."