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Yearly Archives: 2019

Precious Metals Broker Sentenced to Prison for Willfully Failing to File Tax Returns

May 7, 2019

An Atlanta precious metals broker was sentenced to 21 months in prison following his Dec. 12, 2018, conviction by a federal jury on three counts of failing to file income tax returns. Hakim has been in custody since April 12, 2019. He was arrested and jailed after he failed to appear for his original sentencing date.

According to court documents and evidence presented at trial, Saleem Hakim was in the business of brokering the sale of precious metals to clients. As a precious metals broker, Hakim received funds from clients, converted a portion of the funds to precious metals, and kept the remainder for his personal use.

For The Years 2011 Through 2013, Hakim Retained
In Excess of $1 Million 
 

Despite receiving income in excess of the filing thresholds and knowing his obligation to make and file tax returns, Hakim did not file any income tax returns with the Internal Revenue Service (IRS).

Hakim is going to prison, is to serve 1 year of supervised release and was ordered to pay $639,006 in restitution to the IRS and $4,603.28 in costs of prosecution.

Have an IRS Tax Problem?  

 Contact the Tax Lawyers at 

Marini& Associates, P.A.  
 

 

for a FREE Tax HELP Contact Us at:
www.TaxAid.com or www.OVDPLaw.com 
or Toll Free at 888-8TaxAid (888) 882-9243 



 

Read more at: Tax Times blog

Former Goldman Banker Extradited to US to Face Charges

May 7, 2019

Malaysia has extradited a former Goldman Sachs banker to the United States for 10 months to face criminal charges linked to a multibillion-dollar scandal.

 

Roger Ng has been detained in Kuala Lumpur since Nov. 1, 2018 after the US Department of Justice (DoJ) announced charges against him for allegedly laundering funds diverted from the 1Malaysia Development Berhad (1MDB) fund while he was managing director of Goldman Sachs.

A Malaysian national, Ng Chong Hwa, 46, also known as “Roger Ng,” has been extradited from Malaysia to the United States to face charges of conspiring to launder billions of dollars embezzled from 1Malaysia Development Berhad (1MDB), Malaysia’s investment development fund, conspiring to violate the Foreign Corrupt Practices Act (FCPA) by paying bribes to multiple government officials in Malaysia and Abu Dhabi, and conspiring to violate the FCPA by circumventing the internal accounting controls of Goldman Sachs.

In a three-count indictment unsealed last year, Ng, of Kuala Lumpur, Malaysia, was charged with crimes he allegedly committed while employed as a Managing Director at Goldman Sachs "the Financial Institution", which underwrote more than $6 billion in bonds issued by 1MDB in three separate bond offerings in 2012 and 2013.

As alleged in the indictment, between approximately 2009 and 2014, Ng conspired with others to launder billions of dollars misappropriated and fraudulently diverted from 1MDB, including funds 1MDB raised in 2012 and 2013 through three bond transactions 1MDB executed with the Financial Institution.  As part of the scheme, Ng and others conspired to bribe government officials in Malaysia and Abu Dhabi to obtain and retain lucrative business for the Financial Institution, including the 2012 and 2013 bond deals.  They further conspired to launder the proceeds of their criminal conduct through the U.S. financial system.

Court filings further allege that Ng, Low Taek Jho, also known as  “Jho Low,” and the co-conspirators used co-defendant Low’s close relationships with high-ranking government officials in Malaysia and Abu Dhabi to obtain and retain business for the Financial Institution through the promise and payment of hundreds of millions of dollars in bribes.

In the course of executing the scheme, Ng and others at the Financial Institution conspired to circumvent the Financial Institution’s internal accounting controls.  Through its work for 1MDB during that time, the Financial Institution received approximately $600 million in fees and revenues along with increased reputational prestige. At the same time, Ng and other co-conspirators at the Financial Institution received large bonuses and enhanced their own reputations at the Financial Institution.

In Total, More Than $4.5 Billion Was Misappropriated From The 1MDB Bond Proceeds.

 

Low remains at large. The charges in the indictment are merely allegations, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Goldman Sachs is under scrutiny for its role as underwriter and arranger of three bond sales that raised $6.5 billion for 1MDB.

The DoJ has estimated that $4.5 billion was misappropriated by high-level 1MDB fund officials and their associates between 2009 and 2014, including some of the funds that Goldman Sachs helped to raise.

Goldman Sachs has consistently denied wrongdoing and said certain members of the former Malaysian government and 1MDB lied to it about how the bond proceeds would be used.

The Department received significant assistance from:

  • by the government of Malaysia, including the Attorney General’s Chambers of Malaysia, the Royal Malaysia Police and NCB Interpol Malaysia,
  • the Attorney General’s Chambers of Singapore, the Singapore Police Force-Commercial Affairs Division,
  • the Office of the Attorney General of Switzerland,
  • the Judicial Investigating Authority of the Grand Duchy of Luxembourg and the Criminal Investigation Department of the Grand-Ducal Police of Luxembourg.

The International Unit of the Criminal Division’s MLARS is home to the Kleptocracy Asset Recovery Initiative a team of dedicated prosecutors working to prosecute individuals and forfeit the proceeds of foreign official corruption that has affected the U.S. financial system and, where appropriate, return those proceeds to benefit the people harmed by these acts of corruption and abuse of office.

MLARS’s Bank Integrity Unit investigates and prosecutes banks and other financial institutions, including their officers, managers, and employees, whose actions threaten the integrity of the individual institution or the wider financial system.

Have a IRS Criminal Tax Problem? 

  
Contact the Tax Lawyers at 
Marini& Associates, P.A. 
for a FREE Tax HELP Contact Us at:
www.TaxAid.com or www.OVDPLaw.com 
orToll Free at 888-8TaxAid (888) 882-9243

Sources

DoJ

NY Post

US News

 

Read more at: Tax Times blog

Perfect Example of How Not to Handle an IRS Collection Matter

May 7, 2019

According to DoJ, an Aliquippa, Pennsylvania, man was sentenced to
18 Months in Prison for Tax Evasion.
 
According to evidence presented in open court, William Rains failed to timely file his individual income tax returns for tax years 1997, 1999, and 2003-2006. Rains also filed false returns for 2000 and 2001, reporting zero income when he in fact he had earned income in those years. The Internal Revenue Service (IRS) assessed over $200,000 in taxes against Rains for all of these years, as well as for tax year 2008.

Now if that wasn't bad enough, William Rains then decide to handle his IRS collection matter, in a completely improper fashion.

From July 2005 Through December 2016,
Rains Evaded The Payment Of His Taxes and
Sought To Thwart IRS Collection Efforts.

  •  He concealed his income and assets from the IRS by using multiple bank accounts, entities, a nominee, and a false IRS financial form.
  • He also caused his wife to move money into accounts in her name and to purchase bank checks to prevent the IRS from collecting taxes he owed.

He is also ordered to serve 3 years of supervised release and to pay $207,634 in restitution to the IRS.

Have an IRS Tax Problem? 

 


Contact the Tax Lawyers at 
Marini& Associates, P.A.  
 

 

for a FREE Tax HELP Contact Us at:
www.TaxAid.com or www.OVDPLaw.com 
or Toll Free at 888-8TaxAid (888) 882-9243 


 

Read more at: Tax Times blog

3rd Circuit in “Bedrosian” Addresses Appellate Standard Of Review In FBAR Penalty Case

May 1, 2019

March 7, 2018 we posted 1st Taxpayer Victory in a "Willful" FBAR Penalty Case! where we discussed that on September 20, 2017, the Eastern District of Pennsylvania issued an important taxpayer friendly opinion regarding the "willfulness" standard in FBAR penalty matters and In Bedrosian v. United States, Case No. 2:15-cv-05853-MMB (E.D. Pa., Sept. 20, 2017), the court held that the government had not met its burden in proving that Bedrosian had willfully violated FBAR reporting requirements. 

We also discussed that this opinion could have a major effect on future IRS decisions in the offshore compliance arena and may cause some taxpayers, to seek a more aggressive approach in addressing prior non-compliance. Then on On May 1, 2018 we posted  1st Taxpayer Victory in a "Willful" FBAR Penalty Case Appealed!

Now the Court of Appeals for the Third Circuit in Bedrosian, 122 AFTR2d 2018-7052 (CA-3, 2018), ruled on
  1. whether a district court has jurisdiction over a Foreign Bank and Financial Accounts (FBAR) matter where the taxpayer only pays part of the assessed FBAR penalty; and
  2. What an appellate court's standard of review should be with respect to a lower court's determination that there was willful violation of FBAR requirements. The Third Circuit also remanded the case because it was not satisfied with the district court's determination that there was no willful violation.
Arthur Bedrosian was a U.S. citizen who, in the early 1970s, opened a savings account with a bank in Switzerland. In 2005, the Swiss bank approached Bedrosian with a loan proposal that he accepted, under which it would lend him 750,000 Swiss Francs and convert his savings account into an investment account. That transaction resulted in a second account being created for Bedrosian, although he claimed that he always considered them one account.

Throughout the decades that Bedrosian maintained the Swiss accounts, he had his longtime accountant prepare his returns. Bedrosian did not inform the accountant of the accounts until the 1990s because, he stated, the accountant never asked about them. When informed, the accountant told Bedrosian that he had been breaking the law for the past 20 years by not reporting the accounts. The accountant also said that the damage was already done, that Bedrosian should do nothing, and that the issue would be resolved on Bedrosian's death when the assets in the Swiss accounts would be repatriated as part of his estate and taxes would be paid on them then.

Based on this advice, as well as his fear that he would be penalized for his years of noncompliance, Bedrosian did not report either Swiss account on his tax returns until 2007, when the accountant died and he hired a new accountant.
 

Bedrosian filed a federal income tax return for 2007 that reflected, for the first time, that he had assets in a foreign financial account in Switzerland. He also filed a FBAR for the first time in 2007. However, he only reported one of his Swiss accounts (which had assets totaling approximately $240,000) and did not report the other account (which had assets totaling approximately $2.3 million).

Bedrosian did not report any of the income that he earned on either Swiss account on his 2007 return. In late 2008, Bedrosian sought advice from his attorney. On advice of counsel, Bedrosian engaged an accounting firm to go back and amend his returns from 2004 to the present. He paid taxes on the gains from his Swiss accounts.

Bedrosian paid the IRS $9,757.89 (i.e., 1% of the penalty assessed) and then filed a complaint in the district court seeking to recover that amount as an unlawful exaction. The IRS counterclaimed for full payment of the penalty, as well as accrued interest on the penalty, a late payment penalty, and other statutory additions to the penalty.
 
The Third Circuit said that allowing a taxpayer to seek recovery of a FBAR penalty under the Little Tucker Act permits that person to seek a ruling on the penalty in district court without first paying the entire penalty, which violates a first principle of tax litigation in district court, pay first and litigate later. The court said, "We are inclined to believe the initial claim of Bedrosian was within the scope of 28 U.S.C. section 1346(a)(1)28 U.S.C. section 1346(a)(1) and thus did not supply the district court with jurisdiction at all because he did not pay the full penalty before filing suit, as would be required to establish jurisdiction under subsection (a)(1)."
 
The Third Circuit then ruled on an issue that it believed was one of first impression, the standard of review of a district court's willfulness determination under the FBAR statute. The court said that, in the context of other civil penalties, it had held that a district court's willfulness determination is primarily a factual determination that is reviewed for clear error; similarly, it had held that the Tax Court's determination of willfulness in tax matters is reviewed for clear error.
 

The Court Concluded That It Should Follow Suit And Hold That A District Court's Determination In A Bench Trial As To Willfulness Under The FBAR Statute Is Reviewed
For Clear Error.


The Third Circuit then agreed with the district court's definition of what constituted willfulness in the FBAR context, but remanded the case because it was not convinced that the district court used the correct legal standard in its determination that there was no willfulness.
 
The court also said that the ultimate determination of non-willfulness by the district court was based on findings related to Bedrosian's subjective motivations and the overall lack of egregiousness of his conduct. The court here said that those criteria are not required to establish willfulness in this context.
 
"The [District] Court Thus Leaves The Impression It Did Not Consider Whether Bedrosian's Conduct Satisfies The Objective Recklessness Standard Articulated In Similar Contexts."
 
Noting that it could not "defer to a determination we are not sure the district court made based on our view of the correct legal standard," the Third Circuit thus remanded the case to the district court to render a new judgment on the issue of willfulness.
 
Have Undeclared Income from an Offshore Bank Account?
 
 
Been Assessed a 50% Willful FBAR Penalty?

 
 
Contact the Tax Lawyers at 
Marini& Associates, P.A. 
 
 
for a FREE Tax Consultation
at: www.TaxAid.com or www.OVDPLaw.com or
Toll Free at 888-8TaxAid (888) 882-9243
 
 

Read more at: Tax Times blog

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