According to the DoJ, Daniel Wälchli pled guilty on March 30, 2023 to conspiring to defraud the United States in connection with a scheme to help wealthy American clients conceal more than $60 million in income and assets held in undeclared offshore bank accounts and evade U.S. income taxes.
Wälchli was a member of the executive board of a Swiss holding company that owned, among other entities, a Zurich-based private bank called Privatbank IHAG Zurich AG (“IHAG”).
According to the allegations in the Indictment, court filings, and statements made in Court:
From in or about 2009 to in or about 2014, Wälchli and his co-conspirators defrauded the IRS by concealing income and assets of three wealthy U.S. clients with undeclared bank accounts at IHAG.
In order to assist the U.S. clients, Wälchli and his co-conspirators devised and implemented a scheme dubbed the “Singapore Solution” to fraudulently conceal the bank accounts of the U.S. clients, their assets, and their income from U.S. authorities.
In furtherance of the fraudulent scheme, Wälchli and his co-conspirators agreed to transfer more than $60 million from undeclared IHAG bank accounts of the 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 in the name of a Singapore-based asset-management firm that Wälchli helped establish.
The U.S. Clients Paid Large Fees To IHAG And Others To Help
Them Conceal Their Assets And Evade U.S. Income Taxes.
Wälchli, 55, of Switzerland, pled guilty to one count of conspiracy to defraud the United States, which carries a maximum sentence of five (5) years in prison.
According to Law360 Walchli was one of six executives who along with Zurich-based Allied Finance Trust AG were named in an indictment unsealed in 2021 as aiding the American taxpayers using the Singapore Solution scheme.
Wayne Franklyn Chinn, one of the clients who the DOJ said benefited from the scheme, pled guilty to one count of tax evasion in 2021. According to associated documents also unsealed in 2021, Chinn hid about $5 million from the IRS between 2001 and 2018 and held income in IHAG accounts, according to the DOJ.
Chinn agreed to turn over $2.2 million in civil forfeitures held in five accounts at two Singapore banks and faced up to five (5) years in prison and possible time under supervised release, restitution and monetary penalties, the DOJ said.
In 2021, Chinn was sentenced to five (5) years probation, including 18 months of house arrest, and restitution of $789,000.
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Read more at: Tax Times blog