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News & Events

The Recent Unsealing of a Criminal Indictment Makes Investors Take Notice

Offshore Account Update

Posted in on January 16, 2015

Investors who have money in offshore accounts need to be aware that the Internal Revenue Service is looking to make examples out of those who do not declare their accounts. Just recently, a new indictment was announced against a U.S.-citizen/Kentucky resident with money that was kept in undeclared offshore accounts. This investor who has been indicted faces up to five years of incarceration if he is convicted of the charges he faces.

Anyone who has not declared offshore accounts is potentially vulnerable to criminal prosecution. If you find yourself worried about bank accounts you have in a foreign country, now is the time to contact a criminal tax lawyer for help.

New Criminal Indictment Shows Aggressive IRS Prosecutions

The news of the recent indictment was released by the U.S. attorney for the Southern District of New York, as well as an Acting Special Agent out of New York who works with the criminal investigations division of the IRS.  The announcement was made when the indictment was unsealed.

In the indictment, which was sought against a man named Peter Canale, the charges included one count of conspiracy to defraud the United States government, evade taxes and file a false income tax return.

The charges arise out of an alleged failure to declare Swiss accounts, report income earned and file an annual Report of Foreign Bank and Financial Accounts with the IRS.

Canale first inherited a Swiss account from a relative.  The account was also left to his brother, Michael. The two brothers met with two financial professionals in Switzerland and it was agreed that the money would remain in the offshore account with the account to be maintained for the benefits of the brothers. The account was not declared to the IRS or otherwise declared to the U.S. government.

Subsequently, Canale met with one of the two Swiss financial advisors again in 2005. A decision was made to open a new account at a Swiss bank called Wegelin. This account was also reportedly not declared to the United States government. The account was also opened in the name of a “sham” corporation, according to the indictment. The ostensible purpose of opening the account in a corporate name was to conceal Canale’s identity.  This account had assets valued at $789,000 as of 2009. The amount in this account shows that the IRS is not going after only people with multi-million dollar accounts but against  many investors whom the agency believes they have enough evidence to secure a conviction against.

Canale did not pay taxes on the money earned from his Swiss accounts, according to the indictment. He is in trouble for not declaring the accounts and for not filing an annual Report of Foreign Bank and Financial accounts (FBAR) between 2007 and 2010.

He is one of many investors who has faced criminal charges as the IRS tries to scare investors with aggressive prosecution. If you have money offshore, you need to contact a New Jersey criminal tax lawyer for help exploring the options available to you, such as voluntary disclosure, before you face an investigation and potential indictment. Let an IRS Attorney with extensive experience in Undisclosed Offshore Accounts help.  Kevin E. Thorn, Managing Partner of the Thorn Law Group, can help limit your exposure to substantial civil penalties and possibly a criminal investigation.


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