A New Jersey man pleaded guilty to a tax evasion scheme that resulted in hiding up to $4.7 million. The scheme also involved HSBC Holdings.
According to the man’s plea, he conspired with bankers from HSBC to hide some of his business assets from the Internal Revenue Service. The bankers in question were in New York, London and Geneva. The man is only one of many HSBC clients who is suspected of using undeclared accounts to commit tax evasion. According to the man’s charging document, he and others used shell companies that were located in jurisdictions that had tax havens. The businesses were specifically created to hide ownership and who controlled the companies’ assets and incomes from the Internal Revenue Service.
The man was sentenced to pay $2.37 million because he failed to file required Reports of Foreign Bank and Financial Accounts. Representatives from the Internal Revenue Service state that private citizens have assisted in the prosecution of several bankers and advisers. The IRS also states that 33,000 taxpayers who have offshore accounts have been able to avoid prosecution for their actions since 2009. The taxpayers participated in an amnesty program that allowed them to pay taxes from previous years. As part of the agreement, taxpayers revealed information regarding the identities of individuals and corporations that assisted them with hiding their accounts from the IRS.
A person who is suspected of tax evasion may be able to avoid the strict penalties that are commonly associated with this crime, such as prison time. A tax attorney may be able to advise a client to participate in an amnesty program or enter into a plea agreement that can help him or her to avoid jail time.
Source: NJ.com, “Watchung man admits to $4.7 million tax evasion scheme with HSBC bankers,” Jan. 7, 2013