Wednesday, March 30, 2011

New FBAR Form and Guidance on FBAR Requirements and Form 1040 Questions

The IRS and/or FinCen have recently released the following:

1.  New FBAR form (Form TD F 90-22.1). 

2.  New FinCen FBAR regulations effective 3/28/11,  previously discussed here.

3.  Notice 2010-31 advising taxpayers:
Beginning March 28, 2011, the recently published final FBAR regulations will be effective and should be referenced, along with the revised FBAR form and instructions, when answering FFA-related questions on 2010 tax and information returns.

Monday, March 21, 2011

Lesser Included Offense to Rescue a Conviction After Confusion of Liability as Aider and Abetter or Causer

I have recently had several blogs arising from the Larson and Pfaff petition relating to the concepts of aider and abetter liability and causer liability under 18 USC §§ 002(a) and (b), respectively.  (To review those, click on the labels below.) Contemporaneously, in the Tax Fraud and Money Laundering class that Larry Campagna and I teach at the University of Houston Law School, we recently covered the lesser included offense concept.  So, I  present today one case where these concepts came together.  I think it nicely illustrates the lesser included offense concept in a nontraditional setting where it is used to save a conviction after the prosecution blurred the roles of the two types of liability under 18 USC § 2.

In United States v. Motley, 940 F.2d 1079, 1082 (7th Cir. 1991), GS here the defendant, an income tax preparer who prepared false returns, had been charged and convicted under 18 U.S.C. §§ 287 and 2(a). The court held that the defendant was not guilty of aiding and abetting under subsection § 2(a) under which he was tried because the Government failed to prove the taxpayers committed the underlying crime. The Seventh Circuit refused to allow the Government to switch on appeal to subsection § 2(b), causer liability, which does not have the element of requiring that there be one or more other persons guilty of the underlying crime. But, the Seventh Circuit saved the day for the Government by holding the defendant liable for the lesser included offense of § 7206(2) which did not have the element requiring that another person (here the taxpayers) be guilty of the crime. The Court reasoned after giving the taxpayer his accomplice victory:

Friday, March 18, 2011

Sentencing Simon (Preliminary and Final) (3/18/11)

Note to Readers:  This blog initially discussed only the opinion on Preliminary Sentencing Findings.  I have since obtained the subsequent sentencing opinion.  I accordingly ad a link to the sentencing opinion and a short discussion of it at the end of this blog.


Only 3 defendants have been tried recently amidst the Government's juggernaut against foreign bank accounts. All were convicted. I have previously discussed here, 2 of those defendants, father and son, who were convicted and sentenced to 40 months each. I want to talk today about the other whose prosecution, technically, did not arise from that juggernaut, but who was tried for foreign bank account violations during the ongoing juggernaut. He is James A. Simon whom I have discussed before here.

Mr. Simons' prosecution apparently arose from an investigated that predated the UBS brouhaha from whence the flurry of criminal charges arose. He had a number of criminal issues beyond just failing to report and pay tax on income stashed in foreign banks and filing the required FBAR. He did not plead and was convicted of multiple counts as will be noted.

Monday, March 14, 2011

Another Plea for Taxpayer with UBS & Credit Suisse Accounts

There is another plea for a taxpayer. The DOJ Tax press release is here. The key facts (which may be supplemented as I learn additional key facts) are:

Taxpayer: Jeffrey Chatfield
Banks : UBS AG (actually UBS Bahamas Ltd.) & Credit Suisse
Entities: Yes
Guilt: By Plea Agreement - one count of tax perjury
FBAR penalty:
Court: SD CA
Judge: Anello, Michael N.

I will fill in more facts when I get them and will then update the spreadsheet.

Addendum 3/16/11:

I downloaded the judgment from Pacer here.  Other documents such as the plea agreement that might offer key information not evident from DOJ's press release were not available.  There are some provisions in the judgment that might be worthy of note, although they are too cryptic for me to put in context.  These are:

Thursday, March 10, 2011

A Third Theory for Conviction in the Larson, Pfaff and Ruble Cases -- Aiding and Abetting / Accomplice Liability

As I noted in an earlier blog titled More on 18 USC § 2(b) Liability from the Larson / Pfaff / Ruble Case, the Government asserted criminal liability for tax evasion directly under 7201 and also asserted liability under 18 USC § 2(b).  Judge Kaplan described these as the first and second theories of criminal liability for evasion. There was a third theory -- aiding and abetting liability -- often called accomplice liability -- under 18 USC § 2(a). Accomplice liability requires that a principal commit the crime; if a defendant aids and abets the actual principal, the accomplice is deemed a principal.

I thought I would offer readers the Judge Kaplan's instructions on accomplice liability (from pp. 5243-5246 of the transcript).

Tuesday, March 8, 2011

Another Plea for Taxpayer with UBS & Credit Suisse Accounts (3/8/11)

There is another plea for a taxpayer. The DOJ Tax press release is here. The key facts (which may be supplemented as I learn additional key facts) are:

Taxpayer: Edward Gurary
Banks : UBS AG & Credit Suisse
Entities: Yes
Guilt: By Plea Agreement - one count of tax perjury
FBAR penalty: $473,000 (Reportedly 50% of high balance)
Court: ND Ohio
Judge: Polster, Dan
I have updated the spreadsheet.

IRS Memo re Processing OVDI Cases (3/8/11)

On 3/3/11, the IRS Deputy Commissioner for Services and Enforcement issued a memo to guide LB&I and SBSE personnel regarding the application of the penalty framework for the OVDI.  The memo is here.  The guts of the memo is this:

Effective as of the date of this memorandum for all offshore voluntary disclosures received after the close of the 2009 Offshore Voluntary Disclosure Program (2009 OVDP), you are authorized until further notice to execute agreements to resolve the tax liabilities related to offshore issues of taxpayers who make voluntary disclosure requests in the following manner:

Monday, March 7, 2011

Snipes Petition for Certiorari Raises Venue Issues

Wesley Snipes filed a petition for certiorari on 2/28/11. The petition is here.  You will recall that he was convicted of three counts of failure to file. See blog on affirmance, "Wesley Snipes Conviction and Sentence Affirmed ." The questions raised in the petition are:


1. Is an accused person deprived of the right under Article III and the Sixth Amendment to be tried only by a jury of the community where venue is proper, when factual questions determinative of whether venue has been correctly laid are determined solely by a jury selected in the place challenged by the defendant as incorrect?

2. Where venue is a contested factual issue in a criminal trial, does the government bear a burden of proof beyond a reasonable doubt or only by a preponderance of the evidence?

Sunday, March 6, 2011

More on 18 USC § 2(b) Liability from the Larson / Pfaff / Ruble Case

In yesterday's blog titled "The Conduct Too Remote Is Not Evasion Argument in the Larson & Pfaff Petition for Certiorari," I discussed the application of 18 USC § 2(b) to make an actor guilty as a principal of a crime committed by another who may be entirely innocent in contrast to 18 USC § 2(a) which requires another criminal actor who the defendant aids and abets. The relevant portion of the § 2(b) is:

(b) Whoever willfully causes an act to be done which if directly performed by him or another would be an offense against the United States, is punishable as a principal.
In the indictment, the Government relied upon both direct liability for their conduct under 7201 and upon 18 USC § 2. The instructions make clear that the Government was relying upon 2(b) (although it also relied on 2(a) as I shall note in a later blog). I provide the instructions below and, after doing that, will provide some further discussion of 2(b) liability from a case differentiating the 2(a) and 2(b) concepts.

Saturday, March 5, 2011

The Conduct Too Remote Is Not Evasion Argument in the Larson & Pfaff Petition for Certiorari

I write to address, perhaps not in linear fashion, the second question presented in the Larson and Pfaff petition for certiorari (see prior blog here). That question is:

2. Whether for ten of the twelve counts of conviction petitioners’ conduct was too remote from the taxpayers’ returns to be charged under 26 U.S.C. §7201.
The charges in this case were (from the superseding indictment with the names of the dismissed and pleading defendants' names omitted):

Another Sentencing for Taxpayer with UBS Account

There is another sentencing of taxpayer. The DOJ Tax press release is here. The key facts (which may be supplemented as I learn additional key facts) are:

Taxpayer: Arthur Joel Eisenberg
Bank: UBS AG
Entities: Yes
Guilt: By Plea Agreement - one count of tax perjury
Sentence: Incarceration 0; home confinement 0; Probation 3 years
FBAR penalty: $2.1 million (Reportedly 50% of high balance)
Court: WD Washington State
Judge: John Coughenour

I have updated the spreadsheet.

Addendum 3/7/10Bill Singer's Street Sweeper Blog (Forbes).

Friday, March 4, 2011

Petitions for Cert in US v. Pfaff, Ruble & Larson

Petitions for certiorari have been filed in the criminal convictions of John Larson, Robert Pfaff and R.J. Ruble in the massive KPMG-related criminal case which drew fame in an earlier iteration (United States v. Stein before 13 defendants were dismissed for prosecutorial abuse). The Second Circuit summary affirmance of the convictions of Larson, Pfaff and Ruble is here. The petition for John Larson and Robert Pfaff is here. The petition for R. J. Ruble is here..

Thursday, March 3, 2011

Credit Suisse Advisor / UBS Banker Charged; DOJ Reaches Out to Him (3/3/11)

Christos Bagios another Swiss banker has been charged with the Klein / defraud conspiracy (18 USC 371). Bagios worked serially with UBS AG, UBS Swiss Financial Advisors AG and then with Credit Suisse Private Advisors. The charge was made by complaint.  (The complaint (with affidavit) is here and is posted with the permission of Tax Analysts).  Interesting underlying facts alleged in the affidavit supporting the complaint that, if true, continues to paint a damning, even if predictable, picture for the Swiss banks. The focus of the misconduct alleged relates to Bagios' time with UBS AG and UBS Swiss Financial Advisors AG.

Bagios was arrested earlier. In the hearing on the complaint, the magistrate judge held that there was probable cause to charge Bagios and required a $500,000 corporate surety bond and $150,000 cash bond.

While at UBS, Bagios is alleged to have conspired with Renzo Gadola, who previously pled (see here) and gave incriminating information on Bagios. Kevin Downing is reported to have represented by telephone during the hearing that "Bagios and Gadola worked together in a UBS unit focused on helping American tax evaders." Also reported is that DOJ officials represented that "they had reached out to Bagios to see if he would cooperate with ongoing tax fraud investigations but said he had not responded."

Tuesday, March 1, 2011

More on Credit Suisse and Its Enablers (3/1/11)

I have previously blogged the recent indictment of 4 Credit Suisse enablers for offshore account skullduggery.  (See "More Enablers Indicted", FTCB (2/23/11).)  According to a Reuters Legal report here:

1. Mr. Agostini, one of the defendants, shifts the focus to Credit Suisse:

"I always acted in the name of the bank and according to their instructions," Agustoni told Reuters via telephone.

"It's not the case that I did anything independently, the bank was always informed and my actions were checked by my bosses," Agustoni said.