Friday, February 14, 2014

Mizrahi Bank Client Pleads for Filing False Tax Return (2/14/14)

Monajem Hakimijoo, a Beverley Hills resident, pleaded to one count of tax perjury arising from an undisclosed foreign account held with Mizrahi Bank through a Turks and Caicos entity.  The DOJ Tax press release is here.  Key excerpts from the press release:
        According to court documents, Hakimijoo, a U.S. citizen, and his brother maintained an undeclared bank account in Israel at Mizrahi Bank in the name of Kalamar Enterprises, a Turks and Caicos Islands entity they used to conceal their ownership of the account.  Hakimijoo and his brother used the funds in the Kalamar account as collateral for back-to-back loans obtained from the Los Angeles branch of Mizrahi Bank.  Although Hakimijoo and his brother claimed the interest paid on the back-to-back loans as a business deduction for federal tax purposes, they failed to report the interest income earned in their undeclared, Israel-based account as income on their tax returns.  In total, Hakimijoo failed to report approximately $282,000 in interest income.  The highest balance in the Kalamar Enterprises account was approximately $4,030,000.

        According to court documents, in March 2013, Hakimijoo was scheduled to be interviewed by Justice Department attorneys and IRS special agents.  Prior to the interview, Hakimijoo, through counsel, provided the attorneys and special agents with copies of his amended tax returns for 2004 and 2005.  When asked if the amended tax returns had been filed with the IRS, Hakimijoo indicated that the returns had been filed.  Shortly thereafter, the IRS determined there was no record of the amended returns being filed with the IRS.  When Hakimijoo was asked to provide copies of cancelled checks to prove that the taxes reflected on the amended returns had been paid, none were provided.

        Hakimijoo is the latest in a series of defendants charged in the U.S. District Court for the Central District of California with concealing undeclared bank accounts in Israel that were used to obtain back-to-back loans in the United States.

* * * *

            Hakimijoo will be sentenced on April 28, 2014, and faces a statutory maximum prison term of three years and a maximum fine of $250,000.  In addition, Hakimijoo has agreed to pay a civil penalty to the IRS in the amount of 50 percent of the highest balance of his one-half interest in the Kalamar account.
My off the cuff comment is that the amended return gambit was incredibly stupid.  But then we don't know all the facts, and he is not pleading to a false statement charge.

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