John Doe Summonses Issued in Tax Evasion Case

Posted in News, Offshore Account Update on January 30, 2015 | Share

A U.S. District Judge in Manhattan federal court has signed an order allowing summonses to be issued requiring several major U.S. companies to provide information on U.S. taxpayers who may be guilty of tax evasion.  The summons is part of a large-scale criminal investigation to identify anyone who participated in a particular tax evasion scheme between 2005 and 2013.

This recent court order is just one of many steps the government has taken in recent years to try to find and penalize individuals who hide assets in foreign accounts in an effort to evade their U.S. tax obligations. Anyone who has not paid taxes in full could potentially be caught up in one of these investigations. If you believe you may be accused of tax fraud or if you are facing charges, now is the time to act before the government comes after you.  Contact a Washington DC IRS lawyer to learn about voluntary disclosure programs and other options that may be available to minimize penalties.

U.S. Government Investigates Sovereign Management & Legal LTD.

The U.S. District Judge in Manhattan federal court has authorized the IRS to issue summonses against:

  • Federal Express Corporation (FedEx)
  • DHL Express
  • The United Parcel Service (UPS)
  • Western Union Financial Services, Inc.
  • The Federal Reserve Bank of New York (FRBNY)
  • Clearing House Payments Company LLC (Clearing House)
  • HSBC Bank USA, National Association

The purpose of the summonses are to require these companies to turn over any and all information about taxpayers who used the services of a company called Sovereign Management & Legal, LTD (Sovereign) in order to evade taxes.  

Sovereign may have helped taxpayers establish foreign accounts and foreign entities and then conceal accounts and assets in order to avoid paying their taxes in full.  Some of the different services that Sovereign allegedly provided include the creation, maintenance and operation of foreign corporations, foreign companies, foreign trusts and foreign foundations. Financial accounts were then opened in the name of the foreign entity in offshore banks so the IRS would not be easily able to trace the banks back to their U.S. owners.

The companies that received the summonses are believed to have been used by investors to correspond with Sovereign and transmit funds to and from Sovereign’s banks, including banks in Panama and Hong Kong.

Because the IRS does not know which taxpayers they are going after, the summonses are called John Doe summonses.  John Doe summonses can be used in a criminal investigation to uncover the identities of people who may have done wrong. In this particular case, the goal of the John Doe summonses is for the IRS to obtain identifying information about people who broke federal tax laws.  The information provided by the companies who receive the summonses could allow the IRS to find and prosecute these individuals.

Both a Manhattan U.S. Attorney and Deputy Assistant General touted the latest court action as step forward in a broader effort to identify and prosecute people who do not comply with all U.S. tax obligations.  The bottom line is, if you have money or assets offshore, the IRS is trying very hard to find you. You need to speak with a Washington DC IRS attorney about your options before they succeed.

Let an IRS Attorney with extensive experience in Undisclosed Offshore Accounts help.  Kevin E. Thorn, Managing Partner of the Thorn Law Group, can help limit your exposure to substantial civil penalties and possibly a criminal investigation.

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