Former professor convicted of tax evasion for offshore accounts

On Behalf of | Feb 20, 2017 | Tax Crimes

A former university professor was recently convicted and sentenced on tax evasion charges. The man will have to serve seven months in federal prison and pay $100 million in fines. Upon his release, he will be supervised for one year.

Notably, the court had discretion to impose a sentence of up to five years in prison. The man’s decision to plead guilty to the charges against him may have contributed to a lighter sentence.

According to the IRS, the man hid millions of income in offshore accounts at a bank in Zurich, Switzerland. The Swiss bank allegedly facilitated the man’s tax evasion by allowing him to open multiple accounts. The man also designated another individual as having nominal control over some of the accounts, apparently to evade being imputed with ownership over the funds.

The deception started in 2008, when the man reportedly received around $80 million from a stock sale. However, the man under reported his income on his 2008 federal income tax return by over $45 million. By 2015, the man’s hidden funds had grown to over $220 million. In sum, the IRS estimates that the man’s 15-year tax evasion scheme defrauded the IRS from about $18 million in income and gift tax.

The IRS generally requires U.S. citizens to file Reports of Foreign Bank and Financial Accounts. In addition to filing fraudulent federal income tax returns, the man also failed to file this report. If you have offshore assets, make sure you consult with a tax lawyer to ensure you are complying with all the legal requirements.

Source: Democrat & Chronicle, “Ex-UR professor, fined $100M, sentenced to 7 months in tax case,” James Goodman, Feb. 10, 2017