Saturday, June 15, 2013

New Indictment Related to Offshore Accounts (6/15/13)

DOJ Tax has announced, here, the indictment of a Wyoming couple, Robert and Judy Sathre, for filing a false tax return for 2007.  The indictment (with attached penalty summary) is here.  He had a substantial amount of income in the mid-1990s which he concealed from the IRS and failed to pay tax.  Those years are, of course, beyond the criminal statute of limitations.  But, for years within the statute he further concealed income in an offshore bank and thus filed a false tax return.  The following is the description of the allegations from the DOJ Tax Press release:
According to the indictment, the Sathres concealed assets by opening a foreign bank account in the Caribbean island of Nevis and by using purported trusts. In a ten-month period spanning 2005-2006, Mr. Sathre sent over $500,000 to the account in Nevis to keep the funds out of reach from the IRS. When Robert Sathre sold the Rock Stop in 2007, he had over $1,250,000 from the sale proceeds wired to the trust account of a Wyoming law firm. Later the Sathres directed the law firm to wire $900,000 from the trust account to their account at the Bank of Nevis. They also provided a false declaration and false promissory note to the Bank of Nevis to conceal the source of this transfer. Robert Sathre obtained a debit card linked to the foreign account to access funds locally. He also provided the Bank of Sheridan with an IRS form on which he falsely claimed that he was neither a citizen nor a resident of the United States. 
The indictment also alleges that the Sathres tried to conceal their ownership of real estate. They used a purported trust to encumber their residence at Troon Place in Sheridan and to conceal their ownership of property in Hennepin County in Minnesota. To conceal ownership of the Rock Stop, they similarly used a second purported trust, at one point resigning as trustees and appointing their teenage daughter as the trustee. 
The indictment also charges Judy Sathre with one count of filing a false tax return for 2007. The indictment alleges that the return was false both for reporting only $42 in interest income and for failing to disclose that she had a financial interest and signatory authority over the bank account at the Bank of Nevis.
It is unclear why, with this fact pattern, the indictment would charge a single count.  Of course, these offshore cases often ultimately plead to a single count.  But, why would there not be additional tax perjury counts and/or FBAR counts pending the plea?  Perhaps the plea bargain is wired into the original indictment, but that can usually be handled a different way.

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