Senate Subcommiittee Report Discusses Offshore Account Father-Son Convictions (7/20/12)

I previously reported on the Senate report focusing on alleged money laundering by HSBC.  See Senate Subcommittee to Report on HSBC Money Laundering (7/16/12), here.  The report has many anecdotes of misbehavior, but one relates to a prosecution and conviction we have discussed before.  We noted the prosecution of a father and son team -- Mauricio Cohen Assor and Leon Cohen Levy

My prior blogs on this father-son team are:

• Father-Son Convictions Affirmed (4/21/12), here.
• First Sentencing in Offshore Case that Went to Trial (2/5/11), here.
• More Offshore Account Charges -- Of HSBC (Reputedly) and Recorded Conversations (4/21/10), here.

The Senate Subcommittee's report describes their conduct in more detail as follows (pp. 279-281, footnotes omitted):

Cohen Bearer Share Accounts. Mauricio Cohen Assor and Leon Cohen Levy, father and son, were hotel developers in Miami Beach.1667 On April 14, 2010, both were indicted in Florida on charges of conspiring to commit tax fraud and filing false tax returns.The Justice Department charged that the Cohens had used bearer share corporations and shell companies to help conceal $150 million in assets and $49 million in income from the IRS. Both resided in Miami Beach, Florida.   

The indictment explained that “bearer share corporations are often set up in tax havens to hide the true ownership of assets, because ownership records are not maintained and nominee officers and directors are often used to appear to control the affairs of the corporation.” 

Prominent Neurosurgeon Convicted for Offshore Accounts (8/23/12)

DOJ Tax has announced the conviction of Dr. Arvind Ahuja on one count of filing false tax returns (tax perjury, Section 7206(1)) and one count of failing to file the FBAR.  The press release is here.

The key facts (or, I hope, reasonable projections from the facts) are:

Taxpayer:  Dr. Arvind Ahuja, a "prominent neurosurgeon"
Age: ___
Conviction Date: 8/22/12
Banks: HSBC in India; also HSBC account  in the Bailiwick of Jersey, a British Crown dependency located in the Channel Islands off the coast of Normandy
Enabler:  HSBC India representative in New York
Entities: No.
Guilt: Jury Conviction
Count(s) of Conviction: Tax Perjury (Section 7206(1))-one count; FBAR-1 count
Maximum Possible Sentence:  8 years.
Omitted Income:  $2.7 million for years 2005 through 2009
Estimated Tax Loss:  $900,000 (see discussion below; this is my estimate based on the omitted income; and assuming that the tax loss attributable to the acquitted years will be treated as a tax loss for sentencing purposes; if not, the tax loss for the year involved in the counts of conviction is reported by a commenter below to be $89,000.)
Indicated Sentencing Range: 41-51 months (based on assumption as to the relevant conduct tax loss and without considering good time credit (see discussion below); if the tax loss does not include the years other than the single year for the counts of conviction limiting the tax loss $89,000, the resulting indicated Guidelines range is 27-33 months, which would make a Booker variance down to no material  incarceration much more palatable to the sentencing judge and the appellate panel, if appealed; certainly the cosmetics of $89,000 as opposed to $900,000 is significant)
FBAR Penalty: ? [No indication that this has been set; I would expect it to be agreed upon or paid by sentencing and would be 50% of the highest year, in line with the other cases; the defendant likely will want to resolve this issue prior to sentencing, but is not required to do so]
Sentencing Date:;  1/18/13
Court: ED WI
Judge: Charles N. Clevert, Jr. (Wikipedia entry here)

Father-Son Convictions Affirmed (4/21/12)

I have written earlier about the father and son duo who were convicted for traditional tax crimes (Klein conspiracy and Tax Obstruction), although they had foreign accounts.  See First Sentencing in Offshore Case that Went to Trial (2/5/11), here; and More Offshore Account Charges -- Of HSBC (Reputedly) and Recorded Conversations (4/21/10), here.  Their convictions and sentences were upheld in a cryptic per curiam affirmance.   United States v. Cohen Assor, 2012 U.S. App. LEXIS 7990 (11th Cir. 2012), here.  The offshore accounts involved were with HSBC.

Another UBS Client is Sentenced to Probation (5/23/11)

Taxpayer: Lucille Abrahamsen Jackson
Banks : UBS AG
Entities: Yes
Guilt: By Plea Agreement - Tax Perjury (one count)
Incarceration (in months): 0
Probation: 1 year
FBAR penalty: $379,688
Fine: ?
Court: D NJ
Judge: Denis Cavanaugh
Age at sentencing: ?

Articles:
USAO D NJ Press Release

More Offshore Account Charges -- Of HSBC (Reputedly) and Recorded Conversations (4/21/10)

On April 14, 2010, the Government filed a criminal complaint in the Southern District of Florida against Mauricio Cohen Assor and Leon Cohen Levy, father and son. They are real estate developers who were either legal residents or permanent legal residents at all times and thus were subject to U.S. income tax and FBAR reporting just as other citizens and residents. The complaint itself is a bare bones Klein tax conspiracy charge. The attached affidavit of the IRS CI Special Agent agent contains the torrent of words and claims the add fluff to a conspiracy charge. There is the now expected allegations of offshore accounts and offshore entities. The bank, reputed to be HSBC rather than UBS, was involved both through New York offices and Swiss offices. The affidavit sets forth some conversations which were recorded, presumably, by the bank. This is pretty or ugly stuff, depending on perspective. We have seen in the UBS matter handwritten notes of phone calls and meetings that are ugly. Recordings are of the same genre, but do tend to nail exactly what was said rather than leaving it to the vagaries of hand written notes.

First Sentencing in Offshore Case that Went to Trial (2/5/11)

Maricio Cohen Assor and Leon Cohen-Levy, previously blogged here, were sentenced yesterday. I include below links to the SD FL USAO press release and some articles, but here are the bullet points I found interesting:

1. Each was convicted of one count of conspiracy (Klein conspiracy) under 18 USC 371 and 2 counts of filing false tax returns under 26 USC 7212.  The maximum permissible sentence for those counts of conviction was 11 years each.

2. Each received 10 years incarceration (mitigated only if they qualify for the rather minimal good time benefit).

DOJ Tax Budget Request: Promo Piece with Some Statistics (9/19/12)

I am not sure exactly when this came out.  The pdf copy I have says that it was created in February 2012, so I am behind in getting to it.  In any event, here it is.  Department of Justice 2013 DOJ Tax Division FY 2013 Congressional Budget, here.

Key excerpts related to criminal tax enforcement that has been blogged frequently here (some footnotes omitted):

[*1] 

To help achieve uniformity in nationwide standards for criminal tax prosecutions, the Tax Division’s criminal prosecutors authorize almost all grand jury investigations and prosecutions involving violations of the internal revenue laws. Alone or in conjunction with Assistant United States Attorneys, Tax Division prosecutors investigate and prosecute these crimes. In the last few years, the Division has authorized between 1,300 and 1,800 criminal tax investigations and prosecutions per year. 

Improving Voluntary Compliance. The Tax Division’s success rate in its litigation – more than 90% – has an enormous effect on voluntary tax  compliance. fn2 By law, the IRS cannot make public the fact of an IRS audit, or its result. By contrast, the Tax Division’s important tax litigation victories receive wide media coverage, leading to a significant multiplier effect on voluntary compliance. fn3 Efforts of the IRS and the Tax Division are having a positive effect on voluntary compliance. According to the most recent survey by the IRS Oversight Board, 87 percent of those surveyed think it is “not at all” acceptable to cheat on taxes. fn4 Also, the Commissioner’s Voluntary Disclosure Initiative, timed to coincide with the Division’s ongoing criminal and civil enforcement concerning unreported offshore accounts, resulted in an unprecedented number of taxpayers, almost 15,000, attempting to “return to the fold” and paying back taxes, interest and penalties due that will likely total in at least the hundreds of millions of dollars. As an integral part of the IRS’s enforcement efforts, the Tax Division is partially responsible for the IRS’ ability to collect over $2 trillion in taxes each year. fn5