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New Criminal Indictment Unsealed

Posted in Offshore Account Update on January 16, 2015 | Share

The government has been aggressively targeting U.S. investors who have failed to report offshore accounts.  Just recently, the U.S. attorney for the Southern District of New York and the Acting Special Agent for the NY Criminal Investigations Division of the Internal Revenue Service announced that an indictment had been unsealed. The indictment was against a resident of Kentucky named Peter Canale, who is a U.S. citizen.  Canale was accused of conspiring with others to willfully fail to report assets and income to the United States government.

Canale’s account was not a multi-million dollar account when opened, but had an opening balance of only around $789,000.  His indictment shows that the U.S. government is casting a wide net in terms of who may face indictments for failure to comply with tax rules. If you have money offshore you have not declared, you too could face potential criminal prosecution. You need to act, and an experienced DC criminal tax lawyer can assist you in understanding your options for coming forward and participating in voluntary disclosure programs before you face arrest.

New Criminal Indictment for Undeclared Offshore Accounts

Canale is accused of conspiring with his brother and certain Swiss citizens, including two Swiss financial professionals.  The charges against Canale arise out of an alleged willful failure to report interest in undeclared offshore accounts.

Canale and his brother, Michael, were first left money in a Swiss bank account when a relative died. After receiving the inheritance, the brothers met with the two Swiss financial professionals and determined they would continue to keep the assets in the account. The account was undeclared and would be maintained for the benefits of the brothers.

In 2005, one of the Swiss financial advisors the brothers had met with earlier assisted Canale in opening another undeclared account at a Swiss bank known as Wegelin. The account was reportedly opened in the name of a sham foundation so that Canale’s identity would be kept concealed. As of December 2009, this account had assets valued at $789,000.

Americans with offshore accounts are required by law to alert the IRS to the existence of the investments. They must report money earned on those accounts and pay taxes on the income. They also must file a Report of Foreign Bank and Financial Accounts (FBAR) with the IRS each year.  However, between 2007 and 2010, Canale allegedly willfully failed to report the interest and income earned on his Swiss accounts and also failed to file the FBAR.

He has been charged with one count of conspiracy to defraud the U.S., evade taxes and file a false tax return. If convicted, the maximum sentence is five years of incarceration. 

The IRS is routinely prosecuting cases now in an effort to make an example of investors. In past cases, fines have been collected exceeding the value of the money kept in undeclared accounts. The IRS has also pushed for incarceration to act as a deterrent to other investors. 

If you have money offshore, you need to be sure you do not become one of their scapegoats and face criminal indictment. 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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