Jump to Navigation

Former U.S. citizen pleads guilty to tax fraud

No one, not even U.S. citizens who renounce their citizenship can avoid the long arm of the Justice Department when they are hunting for concealed tax dollars. Earlier this week, one such person pleaded guilty to one count of filing a false tax return.

U.S. citizens and companies must pay a tax on their global earnings, which is why the Justice Department pursues offshore assets, to account for those taxes. One individual utilized a web of companies and bank accounts stretching from Hong Kong to Switzerland to evade U.S. tax authorities. In 2012, he even walked into the U.S. embassy in Slovakia to renounce his citizenship.

This particular individual pleaded guilty to filing a false tax return for his 2007 and 2008 taxes. Specifically, he failed to report interest income earned on Swiss bank accounts amounting to $77,298 and $206,408, respectively.

The reason he was able to avoid paying his taxes for nearly 10 years is because of the way he structured his companies and accounts. He established a Hong Kong company in 2006 called Dragonflyer. He then used that company to open a Swiss bank account in the company's name. Later that year, Dragonflyer received $12 million from a Panamanian company. That Panamanian company is named after the individual that pleaded guilty.

So, according to the court filings, he used a roundabout collection of companies and bank accounts to funnel his money through several countries with the assumed goal of avoiding U.S. taxes. Regardless, the Justice Department was able to track the financial transactions and catch him in Switzerland. He faces a maximum sentence of three years in prison, a $250,000 fine and $84,849 in restitution to the IRS.

Most people won't go through such loops to avoid paying their taxes. However, if you fail to report income on your tax return, then you may face criminal consequences. In that case, you may want to consult with a defense attorney.

Source: Department of Justice, "Former U.S. Citizen Pleads Guilty to Tax Fraud Related to Swiss Financial Account," Office of Public Affairs, Feb. 3, 2016

No Comments

Leave a comment
Comment Information
Contact Us

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy


We accept these major credit cards

Visa, MasterCard, Amex, Discover

The Naperville, Illinois, law firm of Jim Ryan & Associates is available to serve people throughout the Chicago metropolitan area with a focus in DuPage County, the western suburbs and Naperville, in communities such Downers Grove, Wheaton, Carol Stream, Bloomingdale, Addison, Itasca, Warrenville, Woodridge, Oswego, Yorkville, Roselle, Aurora and Elmhurst. We also represent students and parents of students who attend any of the area schools and universities, including Naperville North High School, Naperville Central High School, Neuqua Valley High School, Waubonsie Valley and North Central College.

Privacy Policy | Business Development Solutions by FindLaw, a Thomson Reuters business.