U.S. Accountant In Panama Papers Investigation Sentenced To Prison
A U.S. accountant was sentenced in the Southern District of New York to 39 months in prison for wire fraud, tax fraud, money laundering, aggravated identity theft, and other charges, announced Acting Assistant Attorney General Brian C. Rabbitt and Acting U.S. Attorney Audrey Strauss of the Southern District of New York.
Richard Gaffey, aka Dick Gaffey, 76, a U.S. citizen and
resident of Medfield, Massachusetts, pleaded guilty to one count of conspiracy
to commit tax evasion and to defraud the United States; one count of wire
fraud; one count of money laundering conspiracy; four counts of willful failure
to file Reports of Foreign Bank and Financial Accounts, FinCEN Reports 114; and
one count of aggravated identity theft.
In addition to 39 months’ imprisonment, U.S. District Judge Richard M.
Berman ordered Gaffey to serve three years of supervised release, to pay
forfeiture in the amount of a sum of $5,373,609 and restitution in the amount
of $3,459,315, and to pay a fine in the amount of $ 25,000.
Gaffey was charged along with Harald Joachim von der Goltz,
Ramses Owens, and Dirk Brauer in connection with a decades-long criminal scheme
perpetrated by Mossack Fonseca & Co. (Mossack Fonseca), a Panama-based
global law firm, and its related entities.
Gaffey previously pled guilty to the charges, and was sentenced today by
U.S. District Judge Richard M. Berman.
According to the allegations contained in the indictments,
other filings in this case, and statements during court proceedings, including
Gaffey’s guilty plea and sentencing hearings:
Since at least 2000 through 2018, Gaffey conspired with
others to defraud the United States by concealing his clients’ assets and
investments, and the income generated by those assets and investments, from the
IRS through fraudulent, deceitful, and dishonest means. During all relevant times, Gaffey assisted
U.S. taxpayers who were required to report and pay income tax on worldwide
income, including income and capital gains generated in domestic and foreign
bank accounts.
Gaffey helped those U.S. taxpayers evade their tax reporting
obligations in a variety of ways, including by hiding the beneficial ownership
of his clients’ offshore shell companies and setting up bank accounts for those
shell companies. These shell companies
and bank accounts made investments totaling tens of millions of dollars. For one U.S. taxpayer, Gaffey advised how to
covertly repatriate approximately $3 million to the United States by reporting
to the IRS a fictitious company sale that never actually occurred to evade
paying the full U.S. tax amount. Gaffey
was assisted in this scheme through the use of Mossack Fonseca, including
Ramses Owens, a Panamanian lawyer who previously worked at Mossack Fonseca.
Gaffey was the U.S. accountant for Harald Joachim von der
Goltz. From 2000 until 2017, von der
Goltz was a U.S. resident and was subject to U.S. tax laws, which required him
to report and pay income tax on worldwide income. In furtherance of von der Goltz’s efforts to
conceal his assets and income from the IRS, Gaffey falsely claimed that von der
Goltz’s elderly mother was the sole beneficial owner of the shell companies and
bank accounts at issue because, at all relevant times, she was a Guatemalan
citizen and resident, and – unlike von der Goltz – was not a U.S.
taxpayer. In support of this fraudulent
scheme, Gaffey submitted the name, date of birth, government passport number,
address, and other means of identification of von der Goltz’s elderly mother to
a U.S. bank in Manhattan.
Von der Goltz was previously sentenced by Judge Berman
principally to 48 months’ imprisonment.
Owens and Brauer remain at large.
The Justice Department praised the outstanding investigative
work of IRS-Criminal Investigation and U.S. Immigration and Customs
Enforcement’s Homeland Security Investigations.
The Justice Department’s Tax Division and Office of International
Affairs, the FBI, and law enforcement partners in France, the United Kingdom,
and Germany provided significant assistance.
This case is being prosecuted by Trial Attorney Michael
Parker of the Criminal Division’s Money Laundering and Asset Recovery Section
of the Justice Department and Assistant U.S. Attorneys Eun Young Choi and Thane
Rehn of the Manhattan U.S. Attorney’s Office’s Complex Frauds and Cybercrime
Unit and Money Laundering and Transnational Criminal Enterprises Unit, with
substantial support from previous co-counsel, Trial Attorney Parker Tobin of
the Tax Division.
The charges as to Owens and Brauer are merely accusations,
and they are presumed innocent unless and until proven guilty.
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