Indictment Unsealed Against Six Individuals and Foreign Financial Service Firm for Tax Evasion Conspiracy
An indictment was unsealed today in New York, New York, that
charges offshore financial service
executives and a Swiss financial services company with conspiracy to defraud
the IRS by helping three large-value U.S. taxpayer-clients conceal more than
$60 million in income and assets held in undeclared, offshore bank accounts and
to evade U.S. income taxes.
According to the indictment, from 2009 to 2014, Ivo
Bechtiger, Bernhard Lampert, Peter Rüegg, Roderic Sage, Rolf Schnellmann,
Daniel Wälchli and Zurich, Switzerland-based Allied Finance Trust AG allegedly
defrauded the IRS by concealing income and assets of certain U.S. taxpayer
clients with undeclared bank accounts located at Privatbank IHAG (IHAG), a
Swiss private bank in Zurich, Switzerland, and elsewhere. In order to assist
those clients, the defendants and others allegedly devised and used a scheme
called the “Singapore Solution” to conceal the bank accounts of the U.S.-based
clients, their assets, and their income from U.S. authorities. In furtherance of
the scheme, the defendants and others allegedly conspired to transfer more than
$60 million from undeclared IHAG bank accounts of the three U.S. clients
through a series of nominee bank accounts in Hong Kong and other locations
before returning the funds to newly opened accounts at IHAG, ostensibly held in
the name of a Singapore-based asset manager. The U.S. clients allegedly paid
large fees to IHAG and others to help them conceal their funds and assets.
“Prosecuting offshore tax evasion remains one of the Tax
Division’s highest priorities,” said Acting Deputy Assistant Attorney General
Stuart M. Goldberg of the Justice Department’s Tax Division. “Taxpayers
contemplating hiding money abroad – and the foreign bankers, attorneys and
finance professionals who design and execute strategies to assist their evasion
– should know that the Tax Division and IRS have the investigative resources
and expertise to unravel even the most elaborate schemes.”
“As alleged, the individual defendants and the Swiss firm Allied
Finance conspired to defraud the IRS by assisting U.S. taxpayers in avoiding
their tax obligations,” said U.S. Attorney Audrey Strauss for the Southern
District of New York. “They allegedly did this through an elaborate scheme that
involved concealing customer assets at a Swiss private bank through nominee
bank accounts in Hong Kong and elsewhere, with funds returning to the private
bank in the name of a Singapore firm. One such U.S. customer, Wayne Chinn,
pleaded guilty to his participation in the so-called ‘Singapore Solution,’
forfeited more than $2 million to the United States, and awaits sentencing for
his admitted crime.”
If convicted, the defendants face a maximum penalty of five
years in prison, supervised release, and monetary penalties, and the corporate
defendant faces monetary penalties. An indictment is merely an allegation and
all defendants are presumed innocent until proven guilty beyond a reasonable
doubt in a court of law.
Also unsealed today was the guilty plea of Wayne Franklyn
Chinn, of Vietnam and San Francisco, California, one of the U.S.
taxpayer-clients, who participated in the Singapore Solution scheme.
According to court documents filed in relation to his guilty
plea, from 2001 through 2018, Chinn concealed approximately $5 million in
undisclosed and untaxed income. During this period, Chinn held accounts in
nominee names at Privatbank IHAG. Beginning in 2010, Chinn wired funds from
these offshore accounts through nominee accounts in Hong Kong before returning
them to newly opened accounts at IHAG held in the name of a Singapore based
trust company acting on behalf of two foundations created to conceal Chinn’s
ownership of the accounts. Chinn subsequently transferred the funds out of
Switzerland to undeclared accounts in Singapore. Chinn did not file any tax
returns or disclose his foreign bank accounts during the years at issue.
Chinn pleaded guilty to one count of tax evasion which
carries a maximum penalty of five years in prison. Chinn also consented to the
civil forfeiture of 83% of the funds held in five accounts at two Singapore
banks, which resulted in the successful forfeiture and repatriation to the
United States of approximately $2.2 million. The civil forfeiture proceeding is
United States of America v. Certain Funds on Deposit in Various Accounts, 20
Civ. 3397 (LJL).
Chinn is scheduled to be sentenced on Nov. 19, and faces a
maximum penalty of five years in prison. He also faces a period of supervised
release, restitution and monetary penalties. 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; U.S. Attorney Audrey Strauss for the
Southern District of New York; and Chief James Lee of IRS-Criminal
Investigation made the announcement. The Department of Justice Office of
International Affairs, the Singapore Attorney-General’s Chambers and the
Commercial Affairs Department of the Singapore Police Force provided
significant assistance in this matter.
The IRS-Criminal Investigation Division is investigating the
case.
Senior Litigation Counsel Nanette Davis and Trial Attorney
Sean Green of the Justice Department’s Tax Division and Assistant U.S. Attorney
Olga Zverovich of the U.S. Attorney’s Office for the Southern District of New
York are prosecuting the case.
Comments
Post a Comment