FATCA criminal convictions are on the rise. The Foreign Account Tax Compliance Act continues to serve as a major headache for individuals and institutions across the globe.
What started out as a primarily civil violation is turning into criminal prosecutions for the DOJ (Department of Justice).
Most recently, Panayiotis Kyriacou, a form investment manager for Beaufort Securities pled guilty to FATCA crimes.
FATCA Guilty Plea: U.S. vs. Panayiotis Kyriacou
As provided by the Department of Justice:
Earlier today, in federal court in Brooklyn, Panayiotis Kyriacou, a former investment manager at Beaufort Securities Limited, a brokerage firm in London, pleaded guilty to conspiring to commit securities fraud and to defraud the United States by failing to comply with the Foreign Account Tax Compliance Act (FATCA).
FATCA is a federal law that requires foreign financial institutions to identify their U.S. customers and report information about financial accounts held by U.S. taxpayers, either directly or through a foreign entity (FATCA Information). FATCA’s primary aim is to prevent U.S. taxpayers from using foreign accounts to facilitate the commission of federal tax offenses. The guilty plea was entered before United States District Judge Kiyo A. Matsumoto. When he is sentenced, Kyriacou faces a maximum of 10 years’ imprisonment.
Richard P. Donoghue, United States Attorney for the Eastern District of New York; Richard E. Zuckerman, Principal Deputy Assistant Attorney General of the Justice Department’s Tax Division; William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); and Jonathan D. Larsen, Special Agent-in-Charge, Internal Revenue Service Criminal Investigation, New York (IRS-CI), announced the guilty plea.
In announcing the guilty plea, Mr. Donoghue thanked the U.S. Securities and Exchange Commission’s (SEC) New York Regional Office and the Washington, D.C. Office, the City of London Police, the U.K.’s Financial Conduct Authority and the Hungarian National Bureau of Investigation for their significant cooperation and assistance during the investigation.
In the fall of 2016, an Undercover Agent contacted Kyriacou and stated that he was a U.S. citizen interested in opening brokerage accounts at Beaufort Securities to execute trades in several multi-million dollar stock manipulation deals in stocks traded on U.S. over-the-counter markets. In furtherance of the scheme, Kyriacou and Beaufort Securities opened six brokerage accounts.
Notwithstanding that a U.S. citizen would be the beneficial owner of each of the accounts, at no time did Kyriacou request FATCA Information from the Undercover Agent. The brokerage accounts were opened for the Undercover Agent in the names of various international business corporations based in Belize, with Belizean nominees listed as the beneficial owners.
In January 2018, Kyriacou facilitated the manipulation of trading in the stock of HD View 360, Inc., a publicly traded U.S. company that traded under the ticker symbol HDVW, by executing a match trade of HDVW stock.
In addition, Kyriacou agreed to launder what the Undercover Agent represented to be the proceeds of securities fraud through the purchase and sale of artworks.
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