Money Matters, Simplified.
New Jersey resident pleads guilty to hiding assets
by Jamie Anderson - September 27, 2009 - comments
UBS has agreed to hand over 4,450 client names under a deal reached last month with the I.R.S. and the Justice Department. The Justice Department is conducting criminal investigations into about 100 UBS clients as a part of its larger program to crack the whip on tax evaders.
New Jersey, September 27: Skeletons are slowly but surely coming out of the cupboard! Juergen Homann, a New Jersey businessman became the fifth UBS AG (NYSE: UBS; SWX: UBSN; TYO: 8657) client to plead guilty to parking funds using offshore accounts and hiding the same from U.S. tax and finance officials.
The plea stated that "Juergen Homann has clearly demonstrated a recognition and affirmative acceptance of personal responsibility for the offense charged."
The revelation
66-year-old Homann confessed that he did not disclose the some money on tax returns from 2001 to 2007 and that he had an amount of $6.1 million parked in an account with UBS.
Under the U.S law, U.S. taxpayers with offshore accounts are required to file a Foreign Bank Account Report (FBAR) form notifying the Internal Revenue Service (IRS) of the account's existence. Such a form is to be filled every year.
Homann who is an international trader in minerals and chemicals will be sentenced in January and faces a maximum sentence of five years in prison.
In addition to a maximum fine of $250,000, Homann agreed to pay a civil penalty of 50 percent of the highest balance in the account, which is likely to be to the tune of $3 million.
Homann, used enterprises set up in Hong Kong as conduits for assets or loans. He transferred his assets to a less-transparent Hong Kong corporation under the name ELM Finance Limited. Prosecutors allege that he used the ELM account for a sham loan of $5 million with which he funded his U.S. business.
The stick
The disclosure comes in the wake of last months deal between UBS and IRS wherein the former has agreed to reveal the names of 4,450 wealthy American clients suspected of evading taxes.
The IRS has given time till Oct. 15 to clients of foreign banks to willingly reveal their offshore assets or risk prosecution.
John DiCicco, acting assistant attorney general in the Justice Department’s tax division, said, “Those who are hiding income and assets in offshore accounts would be well advised to promptly come clean before the government learns about their accounts through other channels.”
“Those who think they can ‘stay below the radar’ face a real risk of prosecution,” added DiCicco.
Prior to Homann, Florida accountant Steven Michael Rubinstein, Florida yacht broker Robert Moran, New York toy salesman Jeffrey Chernick and California businessman, John McCarthy pleaded guilty to failing to disclose UBS accounts.
IRS Commissioner Doug Shulman warned the others in the same league, “The IRS is serious about pursuing people with hidden offshore accounts, and we are stepping up our international efforts. People should make sure they meet their filing requirements. Failure to do so can carry serious consequences."