Monday, August 20, 2012

Massachusetts Man Pleads Guilty In Manhattan Federal Court For Failing To Report Over $5 Million Hidden In Swiss Bank Accounts To The IRS

JACQUES WAJSFELNER pled guilty today in Manhattan federal court to willfully failing to file Reports of Foreign Bank and Financial Accounts (“FBARs”) with the IRS for Swiss bank accounts that he maintained and controlled. WAJSFELNER used the services of Beda Singenberger, a Swiss financial adviser, who was charged in July 2011 for allegedly helping U.S. taxpayers hide more than $184 million at various Swiss banks. One of the banks where WAJSFELNER had an undeclared account was Wegelin & Co., a private Swiss bank that was charged in February 2012 for allegedly helping U.S. taxpayers hide more than $1.2 billion in undeclared funds. As part of his plea agreement, WAJSFELNER agreed to pay back taxes of over $419,000, and to pay a civil penalty of over $2.8 million. He entered his guilty plea before U.S. District Judge Naomi Reice Buchwald.

Manhattan U.S. Attorney Preet Bharara said: “Over and over again, we see people who are privileged to live in this country evading their legal obligation and ethical responsibility to pay their fair share of taxes. As today’s plea, along with the many other cases we have brought against tax cheats makes clear, we will not tolerate this behavior.”

Acting Special Agent-in-Charge Toni Weirauch said: “Anyone who contemplates hiding assets offshore should be concerned about the Internal Revenue Service’s commitment to investigating offshore tax evasion. We continue to access more and more information about individuals who hide their assets, the individuals who help them and the institutions where the assets are hidden. Ultimately, we are dedicated to assuring the American public that all Americans are held to the same standard of paying their fair share.”

According to the Information filed today, the previously filed Singenberger and Wegelin Indictments, and statements made in connection with WAJFELNER’s guilty plea:
Under federal law, when filing Individual Income Tax Returns, form 1040, U.S. taxpayers are required to report their worldwide income. Additionally, taxpayers who have a financial interest in, or signature or other authority over, a bank account in a foreign country with an aggregate value of more than $10,000 at any time during a particular year, are required to file FBARs every year for each qualifying account. The FBAR requires the disclosure of the financial institution where the account is held, the type of account, the account number, and the maximum value of the account during the calendar year for which it is being filed.

From 1995, WAJSFELNER held an account in his own name at an international bank (the “International Bank”), with its headquarters in Zurich, Switzerland. In June 2006, with the assistance of Singenberger, WAJSFELNER also opened an undeclared account at the same bank in the name of Ample Lion Ltd. (“Ample Lion”), a sham corporation formed under the laws of Hong Kong, in an effort to obscure his ownership of the assets in that account from the IRS. He then transferred the assets from his personal account to the Ample Lion account. As of December 31, 2007, the Ample Lion account held assets valued at nearly $5.7 million.

In the fall of 2008, the International Bank began exiting its U.S. cross-border banking business. In order to continue maintaining undeclared accounts, WAJSFELNER opened an undeclared account at Wegelin, a Swiss bank headquartered in St. Gallen, Switzerland, and transferred his assets from the International Bank to Wegelin in June 2009. As of December 31, 2010, WAJSFELNER’s account at Wegelin held assets valued at nearly $5.5 million.

For each of the calendar years from 1995 through 2011, WAJSFELNER failed to file an FBAR with the IRS disclosing his authority over his accounts at the International Bank and at Wegelin. His tax returns for the years 2005 through 2011 were similarly false in omitting the information about his Swiss bank accounts. WAJSFELNER further failed to make voluntary disclosures under the IRS’s Voluntary Disclosure Program.

WAJFELNER, 83, of Weston, Massachusetts, faces a maximum term of five years in prison, a maximum term of three years of supervised release, and fines of the greatest of $250,000, or twice the gross pecuniary gain derived from the offense or twice the gross pecuniary loss to any victim.
The cases against Singenberger and Wegelin are pending. The charge and allegations against them are merely accusations, and they are presumed innocent unless and until proven guilty.

Mr. Bharara praised the outstanding efforts of IRS-CI in the investigation, which he noted is ongoing. Mr. Bharara also thanked U.S. Department of Justice’s Tax Division for their assistance in the investigation.
This case is being handled by the Office’s Complex Frauds Unit. Assistant U.S. Attorneys Daniel W. Levy, Jason H. Cowley, and David B. Massey are in charge of the prosecution.

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