CEO Convicted of Hiding Money in Swiss Bank

Posted in Offshore Account Update on March 27, 2015 | Share

The Department of Justice and the IRS are aggressively pursuing tax evaders and are approaching the crackdown on tax evasion from multiple angles. From targeting bankers to taking criminal action against individual investors, the U.S. government is determined to stop people from parking their money offshore to avoid paying taxes.

One of the latest to be charged for keeping money offshore without reporting it is a CEO of a company called Circle Net.  The CEO, Gregg A. Kaminsky, pled guilty to criminal charges according to Biz Journals.  He now faces a maximum sentence of five years of incarceration and a criminal fine that could total as much as $250,000. Additional civil penalties will also be paid as part of his plea bargain arrangement with the United States.

As this case shows, the consequences of criminal prosecution for tax evasion can truly change your life forever. You may be able to avoid the most severe penalties and escape prosecution if you come forward and voluntarily disclose account you have offshore. However, not every individual is eligible for voluntary disclosure. A Washington DC criminal tax lawyer can help you to try to avoid charges or to respond proactively and strategically if you are under investigation for wrongdoing by the IRS.

CEO Faces Serious Jail Time for Tax Evasion

The Justice Department indicates Kaminsky owned and controlled a foreign account at Union Bank of Switzerland from 2000 to 2008. The account had almost $1.1 million in it by around 2006.  For several years between 2002 and 2009, money was wire transferred from this account into other offshore accounts in Hong Kong and Thailand. Money from at least two different U.S. companies was also directly deposited into the Swiss account.

Kaminsky, like others with foreign bank accounts, is required to file a Foreign Bank Account Report (FBAR) with the Treasury Department every year. However, he failed to disclose any of these accounts. As a result, he did not report or pay taxes on hundreds of thousands of dollars in taxable interest, dividends and other income.

Kaminsky has also been accused of omitting his foreign bank accounts when he completed a Free Application for Federal Student Aid (FAFSA) in order to qualify for need-based assistance with tuition at Emory University where he entered an MBA program.

The United States took action in 2008 to require UBS to disclose the identities of U.S. account holders who may be keeping money in offshore accounts for the purposes of tax avoidance.

Upon hearing reports of this action, Kaminsky closed his UBS account and moved his money into an account he had at HSBC in Hong Kong.  He also filed amended tax returns for 2007 and 2008 disclosing some of his income from offshore accounts, as well as filing FBARs in 2010 for the Hong Kong and Swiss Accounts.

Even as he corrected his past filings, however, he allegedly failed to report approximately $150,000 in taxable income that he earned from participation in an online virtual world called Second Life.

The Justice Department sought to make an example of him for failing to report as much as $400,000 in income and the penalties he faces are severe. In addition to the jail time and criminal fines, he will pay a civil penalty of 50 percent of the value of the money in the HSBC account. This amounts to another $250,635.20.

The IRS will continue to take legal actions like this one against others who may have money offshore. If you have foreign accounts, you need to act now to try to protect yourself. Contact DC criminal tax lawyer Kevin Thorn today for help with your case.

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