Businessman Charged with Tax Evasion for Swiss Assets

Businessman Charged with Tax Evasion for Swiss Bank Accounts

Miami Businessman Charged with Tax Evasion for Swiss Assets

The IRS finally caught up with a businessman in Miami for allegedly failing to report foreign income and assets to the IRS.  The Department of Justice claims that the Taxpayer had hidden more than $20 million in assets, split across more than 20 banks at Swiss Banking institutions such as UBS and Credit Suisse. The IRS claims that once UBS found itself in hot water with the U.S. government for facilitating tax evasion for U.S. person clients, the defendant then took additional steps to conceal their assets. 

As provided by the DOJ:

Defendant Allegedly Hid Millions in Unreported Assets in Series of Swiss Bank Accounts

• • • A federal criminal complaint was unsealed today in the Southern District of Florida charging a Florida man with conspiring to defraud the United States by hiding income and assets offshore and with making a false statement to the IRS.

    • According to the allegations contained in the complaint,[1] between 1985 and 2020, Dan Rotta hid more than $20 million in assets in at least two dozen secret bank accounts at five different Swiss banks, including UBS and Credit Suisse. Over the years, Rotta allegedly earned substantial income from these assets that he did not report on his tax returns.

    • Starting in 2008, after it was reported publicly that UBS and its bankers were under criminal investigation for helping U.S. taxpayers evade their taxes, Rotta allegedly took steps to continue concealing his offshore assets, including by closing his UBS account and moving the funds to Credit Suisse and another Swiss bank, and then later transferring the funds into Swiss bank accounts in the name of nominees.

    • In 2011, the IRS allegedly began auditing Rotta after it obtained evidence that he had unreported foreign financial accounts. Allegedly, Rotta falsely denied that he had any such accounts. During the audit, the IRS allegedly obtained evidence showing Rotta received transfers of hundreds of thousands of dollars from these foreign accounts that he did not report on his tax returns. Rotta allegedly claimed that these transfers were non-taxable loans from third parties and caused his representative to present the IRS with sham loan documents to corroborate his claims. As part of the scheme, Rotta allegedly enlisted his friend and cousin, Co-Conspirator 1, a native and resident of Brazil, to claim to the IRS that he either made or facilitated the fake loans.

    • The IRS allegedly did not believe Rotta and assessed additional taxes as well as penalties and interest against him. Rotta allegedly then caused a petition in U.S. Tax Court to be filed that sought a redetermination of the IRS’s assessments. In that petition, Rotta, through his attorney, allegedly falsely denied having any foreign accounts and attached the fictitious loan documents. Furthermore, Rotta allegedly caused Co-Conspirator 1 to travel to the United States and retell the false loan story to IRS attorneys. In 2017, after Rotta allegedly presented evidence showing that the purported loans had been repaid, the IRS reversed the deficiencies and agreed that Rotta owed no additional tax. Unbeknownst to the IRS, however, the funds that Rotta purportedly repaid to the third parties allegedly went into accounts that he controlled.

    • In 2019, after he allegedly became aware that the IRS would receive copies of his Swiss bank records, Rotta attempted to participate in the IRS’s voluntary disclosure practice. Under that practice, taxpayers who willfully do not comply with their tax and reporting obligations can make timely, accurate and complete disclosures of their conduct, which may be a way to resolve their non-compliance and limit their criminal exposure. In his submission, which was signed under penalties of perjury, Rotta allegedly made several false statements.

    • Rotta was arrested on March 9 and made his initial court appearance today before U.S. Magistrate Judge Jared M Strauss of the U.S. District Court for the Southern District of Florida. If convicted, Rotta faces a maximum penalty of five years in prison for the conspiracy charge and five years in prison for the false statement charge. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

    • Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Markenzy Lapointe for the Southern District of Florida made the announcement.

    • The International Tax and Financial Crimes group of IRS Criminal Investigation is investigating the case.

Late Filing Penalties May be Reduced or Avoided

For Taxpayers who did not timely file their FBAR and other international information-related reporting forms, the IRS has developed many different offshore amnesty programs to assist taxpayers with safely getting into compliance. These programs may reduce or even eliminate international reporting penalties.

Current Year vs Prior Year Non-Compliance

Once a taxpayer missed the tax and reporting (such as FBAR and FATCA) requirements for prior years, they will want to be careful before submitting their information to the IRS in the current year. That is because they may risk making a quiet disclosure if they just begin filing forward in the current year and/or mass filing previous year forms without doing so under one of the approved IRS offshore submission procedures. Before filing prior untimely foreign reporting forms, taxpayers should consider speaking with a Board-Certified Tax Law Specialist who specializes exclusively in these types of offshore disclosure matters.

Avoid False Offshore Disclosure Submissions (Willful vs Non-Willful)

In recent years, the IRS has increased the level of scrutiny for certain streamlined procedure submissions. When a person is non-willful, they have an excellent chance of making a successful submission to Streamlined Procedures. If they are willful, they would submit to the IRS Voluntary Disclosure Program instead. But, if a willful Taxpayer submits an intentionally false narrative under the Streamlined Procedures (and gets caught), they may become subject to significant fines and penalties. 

Need Help Finding an Experienced Offshore Tax Attorney?

When it comes to hiring an experienced international tax attorney to represent you for unreported foreign and offshore account reporting, it can become overwhelming for taxpayers trying to trek through all the false information and nonsense they will find in their online research. There are only a handful of attorneys worldwide who are Board-Certified Tax Specialists and who specialize exclusively in offshore disclosure and international tax amnesty reporting. 

Golding & Golding: About Our International Tax Law Firm

Golding & Golding specializes exclusively in international tax, specifically IRS offshore disclosure. 

Contact our firm today for assistance.