Top Stories
Top Stories
Slideshows

Profiled: Illegal Offshore Account Holders

Illegal Offshore Account Holders
Nearly a half-million Americans have a painful decision to make by Aug. 31 — admit to the IRS that they’ve been hiding secret offshore bank accounts, or take their chances that the government won’t find out and possibly send them to jail. For many, it’s not an easy choice. To take advantage of the amnesty program – the second one it has offered, though the IRS says it will be the last -- the U . S . government is asking account holders to pay a steep penalty: 25 percent of the highest value of t
Photo: Collin Anderson | Brand X Pictures | Getty Images

Nearly a half-million Americans have a painful decision to make by Aug. 31 — admit to the IRS that they’ve been hiding secret offshore bank accounts, or take their chances that the government won’t find out and possibly send them to jail.

For many, it’s not an easy choice. To take advantage of the amnesty program – the second one it has offered, though the IRS says it will be the last -- the U . S . government is asking account holders to pay a steep penalty: 25 percent of the highest value of the account in recent years.

The U.S. government has prosecuted dozens of clients of secret Swiss and other offshore banks since its investigation began in 2009 . B ut recently the government opened a second front in its war on global bank secrecy by filing a so-called “John Doe summons” against HSBC. The summons demands the names of U.S. residents who may have been avoiding taxes with undisclosed accounts at HSBC in India.

A U.S. taxpayer who has an interest in, or signature or other authority over, a financial account in a foreign country with assets in excess of $10,000 is required to disclose the existence of the account on his or her individual income tax return. A U.S. taxpayer must also disclose the existence of the account by filing an FBAR with the U.S. Treasury.

With an estimated 500,000 U.S. residents out there failing to disclose offshore accounts and the government turning up the heat, chances are that many will eventually be identified and prosecuted.

So, who are the offshore account holders that have already been caught and how did they operate their tax haven accounts? Click ahead for the details.

By Eamon Javersand Paul Toscano
Posted 15 April 2011

San Diego Financial Consultant
Jeffrey Chatfield of San Diego was sentenced to three years probation and ordered to pay $96,000 for hiding assets in secret offshore UBS bank accounts. According to the government, around 2000, Chatfield deposited untaxed securities and cash totaling $900,000 into an account at UBS in the Bahamas. He received the assets in 2000 from his consulting work, which included advising private companies seeking to go public. Chatfield filed false tax returns from 2000 to 2008 by not disclosing these ass
Photo: DAJ | Getty Images

Jeffrey Chatfield of San Diego was sentenced to three years probation and ordered to pay $96,000 for hiding assets in secret offshore UBS bank accounts. According to the government, around 2000, Chatfield deposited untaxed securities and cash totaling $900,000 into an account at UBS in the Bahamas. He received the assets in 2000 from his consulting work, which included advising private companies seeking to go public.

Chatfield filed false tax returns from 2000 to 2008 by not disclosing these assets. In 2002, with the help of UBS bankers and others, Chatfield formed Iberia West Ltd., a Bahamian nominee entity. The y then opened a new Swiss UBS account in the name of Iberia West, after which he transferred all his accounts to Credit Suisse. In 2008, Credit Suisse told Chatfield that it was closing all accounts held by U.S. taxpayers , and he closed his accounts.

In February 2009, UBS entered into a deferred prosecution agreement under which the bank admitted to helping U.S. taxpayers hide accounts from the IRS. As part of their agreement, UBS provided the United States government with the identities of some U.S. customers of UBS’s cross-border business, including Chatfield.

Miami Beach Hotel Developers
Mauricio Cohen Assor, 77, and his son, Leon Cohen-Levy, 46, each with residences in Miami Beach, Fla., were sentenced in February 2011 to 10 years in prison after having been convicted of conspiring to defraud the United States. The government said the father and son hid more than $150 million in assets and failed to report $49 million in income. They owned several residential hotels under the trade name Flatotel International, with locations in France, Spain, Brussels and New York City. Their h
Photo: Broward Sheriff's Office

Mauricio Cohen Assor, 77, and his son, Leon Cohen-Levy, 46, each with residences in Miami Beach, Fla., were sentenced in February 2011 to 10 years in prison after having been convicted of conspiring to defraud the United States. The government said the father and son hid more than $150 million in assets and failed to report $49 million in income. They owned several residential hotels under the trade name Flatotel International, with locations in France, Spain, Brussels and New York City.

Their hidden assets included mansions, yachts, luxury automobiles and bank accounts containing te ns of millions of dollars. According to court documents and trial testimony, the two men and their co-conspirators used nominees and shell companies formed in tax havens - including the Bahamas, the British Virgin Islands, Panama, Liechtenstein and Switzerland to conceal their assets and income from the IRS. They also provided false documents to banks, filed false tax returns , and opened accounts under the names of nominees. Among the nominees used were the defendants’ personal secretary and limousine driver.

Pictured: Mauricio Cohen Assor

California-Based Import-Exporter
Bernard Goldstein of Carlsbad, Calif., was indicted by a federal grand jury in November for conspiracy to defraud the IRS. By the end of 2003, Goldstein, a Canadian citizen and lawful permanent resident of the U.S., controlled UBS accounts that held assets totaling more than $2.5 million by the end of 2003, the government said. He was the owner and operator of MG Export-Import Inc., a California-based company that exported oil pipeline products to Russia. Government papers assert that Goldstein
Photo: Getty Images

Bernard Goldstein of Carlsbad, Calif., was indicted by a federal grand jury in November for conspiracy to defraud the IRS. By the end of 2003, Goldstein, a Canadian citizen and lawful permanent resident of the U.S., controlled UBS accounts that held assets totaling more than $2.5 million by the end of 2003, the government said. He was the owner and operator of MG Export-Import Inc., a California-based company that exported oil pipeline products to Russia.

Government papers assert that Goldstein kept assets in bank accounts with UBS from at least 1992 to October 2008. He established a Panamanian corporation named Kasler Management Corp., under which he held several Swiss and Cayman Island bank accounts. Goldstein’s information was also given to the U.S. government by UBS in February 2009.

Watch Distributor In Jericho, NY
In April, 2010, 84-year-old Jules Robbins pled guilty to a criminal information, agreed to pay a civil penalty of $20.8 million, and was sentenced to 12 months probation. As of December 31, 2007, Robbins’ UBS accounts collectively contained nearly $42 million, the government said. In 2000, Robbins used a Swiss attorney to set up a Hong Kong corporation which was eventually listed as the holder of his accounts, while the lawyer served as the nominal head of the corporation. To additionally concea
Photo: Daniel Sheehan | Digital Vision | Getty Images

In April, 2010, 84-year-old Jules Robbins pled guilty to a criminal information, agreed to pay a civil penalty of $20.8 million, and was sentenced to 12 months probation. As of December 31, 2007, Robbins’ UBS accounts collectively contained nearly $42 million, the government said.

In 2000, Robbins used a Swiss attorney to set up a Hong Kong corporation which was eventually listed as the holder of his accounts, while the lawyer served as the nominal head of the corporation. To additionally conceal his involvement with the accounts and the corporation, all of the correspondence for his accounts was received by the lawyer, despite Robbins' wanting to be “100 percent in charge” of investment decisions concerning the accounts.

Former Soviet Soccer Player, New Jersey
In July 2010, Leonid Zaltsberg - who was 75 at the time - admitted to concealing a Swiss bank account that the government said was worth over $2 million. Zaltsberg admitted to signing and filing false tax returns after gaining revenue in accounts under the name of Belton Capital Corp, a nominee Panamanian corporation. Zaltsberg faced a maximum sentence of three years in prison and a maximum fine of $250,000, or twice the amount of financial gain to the defendant or loss to the IRS.
Photo: Paul Bradbury | OJO Images | Getty Images

In July 2010, Leonid Zaltsberg - who was 75 at the time - admitted to concealing a Swiss bank account that the government said was worth over $2 million. Zaltsberg admitted to signing and filing false tax returns after gaining revenue in accounts under the name of Belton Capital Corp, a nominee Panamanian corporation.

Zaltsberg faced a maximum sentence of three years in prison and a maximum fine of $250,000, or twice the amount of financial gain to the defendant or loss to the IRS.

Virginia-Based Doctor
Andrew Silva of Sterling, Va., pleaded guilty in February 2010 to conspiracy to impede the United States. According to court documents, in 1997, Silva inherited an undeclared bank account from his mother at the Zurich, Switzerland, branch of one of the world's largest international banks. In 2009, when the bank told him it was going to close the account, the government said Silva tried to bring money into the United States: He made two trips to Zurich in October and November 2009 and met with th

Andrew Silva of Sterling, Va., pleaded guilty in February 2010 to conspiracy to impede the United States. According to court documents, in 1997, Silva inherited an undeclared bank account from his mother at the Zurich, Switzerland, branch of one of the world's largest international banks.

In 2009, when the bank told him it was going to close the account, the government said Silva tried to bring money into the United States: He made two trips to Zurich in October and November 2009 and met with the Zurich attorney at his office and a Swiss banker at the private wealth office of the international bank.

The Zurich attorney and the Swiss banker refused to wire the money to the United States as it would leave a trail for U.S. law enforcement. Instead, they provided him with $235,000 in U.S. currency. Of that total, Silva received $200,000 in two individually wrapped "bricks" of $100,000 of sequentially numbered, new $100 bills. According to court documents, with the assistance of the Zurich attorney, Silva mailed 26 packages containing over $200,000 in U.S. currency from Switzerland to the United States to himself and another person.

Retired Boeing Sales Manager, Washington
Roberto Cittadini of Bellevue, Wash., pleaded guilty in October 2009 to filing a false tax return, the government said. From 2001 through 2003, Cittadini held as much as $1.86 million in assets in an account at UBS in Switzerland. As with many individuals evading the IRS, Cittadini’s accounts were under the name of a fake overseas corporation, based in Hong Kong. “This is a time of reckoning for those who thought they had found a safe haven for cheating,” said U.S. Attorney Jenny A. Durkan after
Photo: Getty Images

Roberto Cittadini of Bellevue, Wash., pleaded guilty in October 2009 to filing a false tax return, the government said. From 2001 through 2003, Cittadini held as much as $1.86 million in assets in an account at UBS in Switzerland.

As with many individuals evading the IRS, Cittadini’s accounts were under the name of a fake overseas corporation, based in Hong Kong. “This is a time of reckoning for those who thought they had found a safe haven for cheating,” said U.S. Attorney Jenny A. Durkan after the guilty plea in 2009. “People who avoid paying their fair share hurt all of us who follow the law and conscientiously pay our taxes.”

Toy Manufacturer Representative, New York
Jeffrey P. Chernick, of Stanfordville, N.Y., pleaded guilty in July 2009 to charges of filing a false tax return. Chernick, who owns a corporation which represents toy manufacturers in China and Hong Kong, appeared in court in Ft. Lauderdale, Fla., and accepted responsibility for concealing more than $8 million in Swiss bank accounts. In the mid-1970’s, Chernick set up a Hong Kong corporation in order to open offshore bank accounts and conceal assets from the IRS. According to court documents, i
Photo: Goerge Diebold | Photographer's Choice RF | Getty Images

Jeffrey P. Chernick, of Stanfordville, N.Y., pleaded guilty in July 2009 to charges of filing a false tax return. Chernick, who owns a corporation which represents toy manufacturers in China and Hong Kong, appeared in court in Ft. Lauderdale, Fla., and accepted responsibility for concealing more than $8 million in Swiss bank accounts.

In the mid-1970’s, Chernick set up a Hong Kong corporation in order to open offshore bank accounts and conceal assets from the IRS. According to court documents, in order to have access to the millions of dollars Chernick concealed offshore, he utilized credit cards linked to his offshore Swiss bank accounts, which he used to make large purchases while traveling abroad.

Additionally, with the assistance of Swiss bankers and other financial service providers, Chernick set up a sham $700,000 loan between his companies and a second Hong Kong entity in order to repatriate funds into the United States to purchase property adjacent to his home in New York.

Florida Yacht Broker
Robert Moran, of Lighthouse Point, Fla., pleaded guilty in April 2009 to information charging him with filing a false income tax return. He owned Moran Yacht and Ship, which had offices in Fort Lauderdale and Moscow, although his felony conviction caused him to lose his broker’s license. The government said Moran accepted responsibility for concealing more than $3 million in assets in a secret bank account at UBS in Switzerland. During his period of tax evasion, he maintained his accounts throug
Photo: Sakis Papadopoulos | Stone | Getty Images

Robert Moran, of Lighthouse Point, Fla., pleaded guilty in April 2009 to information charging him with filing a false income tax return. He owned Moran Yacht and Ship, which had offices in Fort Lauderdale and Moscow, although his felony conviction caused him to lose his broker’s license. The government said Moran accepted responsibility for concealing more than $3 million in assets in a secret bank account at UBS in Switzerland.

During his period of tax evasion, he maintained his accounts through a nominee Panamanian corporation and communicated via email, telephone and in person about changes in his investments. Moran was sentenced to 2 months in prison after immediately confessing his crime and cooperating with a broad federal investigation. He served his term in early 2010 and paid $1.9 million in penalties and back taxes.