Friday, September 24, 2021

Grand Jury Indicts Alleged Offshore Willful Actor Who Should Have Entered OVDP But Attempted SFCP (9/24/21; 9/27/21)

DOJ Tax announced here the indictment of Mark Anthony Gyetvay.  Basically, as  I  understand  it on  quick review, Gytevay made  mega million in Russian related adventures and failed to (i)  pay tax and (ii) file appropriate FBARs.  A fair inference on the facts claimed in the  Press Release (and presumably the indictment) is that those failures were willful.  Then, Gyetvay tried to enter “Streamlined Filing Compliance Procedures in which he attested that his prior failure to file FBARs and tax returns was non-willful.”  Bad moves.

The opening  paragraph says:

A federal grand jury in Fort Myers, Florida, returned an indictment on Sept. 22 charging a Florida businessman with defrauding the United States by not disclosing his substantial offshore assets, failing to report substantial income on his tax returns, failing to pay millions of dollars of taxes and submitting a false offshore compliance filing with the IRS in an attempt to avoid substantial penalties and criminal prosecution.’ 

There is no mention in the opening paragraph of wire fraud.  But  later, the press release  says (emphasis supplied):

If convicted, he faces a maximum penalty of 20 years in prison for each wire fraud count, five years in prison for each failure to file FBAR count, five years in prison for tax evasion, five years in prison for making a false statement, three years in prison for each count of assisting in the preparation of a false tax return and one year in prison for each willful failure to file a tax return count.

I am in travel status now and so only post this for information purposes now.  I  probably will add some detail later after reviewing the indictment and thinking more about it.  In short, though,  for now, this guy has to be incredibly stupid and greedy (or some combination thereof) to forego the regular OVDP  and attempt the  SFCP.

JAT Comments (added 9/27/21):

1.  The docket entries with key documents (such as the indictment) available for download may be viewed here.  The indictment is here.  I will post later today comments on the indictment.

 2. I offer a description of the Counts and limited comments in the following table.





Aiding or Assisting, § 7206(2)

I think the conduct alleged certainly supports the charge.  However, for false tax returns for the taxpayer signing the returns, I would expect the charge to be tax perjury, § 7206(1). 


Tax Evasion, §7201

The affirmative acts alleged seem to apply to multiple years.  So, I am surprised that there is only 1 count of tax evasion.


Failure to File Tax Returns, § 7203

These Counts are not surprising.  Even with the willfulness element, they are probably the easiest charge to prove


False Statements and Representations 18 USC §§ 1001 and 2 (aiding and abetting)

The Count is based on his SFO Procedures filing allegedly falsely stating that “his failure to report all income, pay all tax, and submit all required information returns, including FBARs, was ‘not due to any willfulness.’ Gyetvay also provided a false portrayal of the reasons for his lack of compliance.”


Failure to File FBARS for 2014 and 2015, 31 USC 5314 5322(a); 31 CFR §§ 1010.350, 1010.3 6(c)-(d), and 010.840(b)

Like the Failure to File Tax Returns, these charges are also probably easy to prove even with the willfulness requirement.


Wire Fraud, 18 USC § 1343

The communications forming the basis for these 3 counts are:  FBAR Submissions (2 counts) and on-Willfulness for SFO Submission (1 count)

2.  On statute of limitations, some Counts appear to be outside six-year statute.  I speculate that Gyetvay’s international travel resulted in suspensions of the applicable statutes of limitations.  See § 6531 (flush language).  For the tax evasion count (Count Four),  the affirmative acts allege go into 2015, so the Count if probably within the statute of limitations.  Alternatively, and in addition, I suppose that sometime in the investigation process, Gyetvay might have given a consent to extend.

3. The indictment is signed by Stanley J. Okula, identified with two others as Trial Attorneys.  Okula has been a long-time nemesis for tax cheats, dating back to his years of service with USAO SDNY.  Interestingly, a lawyer for Gyetvay is Kevin Downing.  See Order at Dkt # 19, here.  I encountered Okula and Downing in the KPMG individual defendant case long ago, when Okula was with USAO SDNY and Downing was with DOJ Tax CES.  Not the most pleasant of encounters; fortunately, my client was dismissed along with a number of others.  Perhaps, Okula and Downing can be unpleasant with each other as they posture in the Gyetvay case.  As an aside, I suspect that in terms of title, Okula may be more than just a “Trial Attorney,” the designation for the line attorneys.  For example, I have seen him referred to as Assistant Chief of the Criminal Appeals & Tax Enforcement Policy Section (CATEPS) and as Senior Litigation Counsel.

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