Tax Evasion Investigation Moves Forward


Posted on January 30, 2015 |

From 2005 to 2013, a company called Sovereign Management & Legal LTD (Sovereign) reportedly helped U.S. citizens perpetrate and carry out schemes to defraud the government of income tax revenue.  The Internal Revenue Service, as well as local prosecuting authorities, are trying very hard to find out exactly which U.S. taxpayers may have sought help from Sovereign and taken steps to hide assets and income.

Recently, a U.S. District Judge in Manhattan moved the government one step forward in their tax evasion investigation. The IRS Commissioner, a Manhattan U.S. Attorney and a Deputy Assistant General commented favorably on the decision made by the District Judge. 

For investors and people who may have been involved with Sovereign, however, the news is not good.  U.S. citizens who have any undeclared assets offshore need to be aware that the government is taking aggressive steps to fight tax evasion.  You could find yourself the subject of an investigation and you could end up being charged with a crime and facing the possibility of jail and huge financial losses. You need to take steps to try to protect yourself now, which means you need to contact a New Jersey IRS attorney today.

John Doe Summonses Issued

The U.S. District Judge presiding over a federal court in Manhattan responded to a government petition seeking something known as a John Doe summons. A John Doe summons is part of a criminal investigation where the government knows that a crime has been committed but is not certain of the identity of the perpetrators of the crime. The summons is used to try to uncover sufficient information about who the law-breaking “John Does” are so the government can go forward with legal action against the individuals.

In this case, the government is looking for people who used the services of a company called Sovereign Management & Legal LTD. in order to avoid paying the full amount of income taxes they owe. The government believes that Sovereign helped U.S. taxpayers improperly create foreign corporations, foreign trusts, foreign foundations and other foreign entities.  Sovereign also allegedly assisted in the creation of accounts at its foreign banks in Panama and Hong Kong and facilitated the movement of money and other assets offshore. The foreign entities made it difficult to trace the money and assets back to their owners, and those who used the services of Sovereign allegedly did not report the assets they had in these offshore accounts, nor did they report income earned on their overseas investments.

The government believes that a variety of companies made it possible for taxpayers and Sovereign to correspond.  The companies include Federal Express Corporation (FedEx), the United Parcel Services (UPS) and DHL Express.  The government also believes a variety of companies made it possible for money to be moved to Sovereign or into the offshore accounts. These companies include Western Union Financial Services, Inc., the Federal Reserve Bank of New York, the Clearing House Payments Company LLC and HSBC Bank.

Summonses have been sought against all of these businesses and the U.S. District Judge granted them. The companies will now be asked to turn over all information that can be used to identify those U.S. citizens who participated with Sovereign in taking steps to hide money and avoid taxes.

Those who may have been implicated in this tax evasion need to act now. In fact, anyone who may not have declared income and has offshore accounts should explore their legal options before they too become the target of an investigation. 

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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