What Happens When An Off-Shore Tax Cheat Doesn't Come Clean


When the IRS says come clean about hiding cash off-shore, they mean it.

Proof? They just got a UBS client from New Jersey to plead guilty for concealing $6.1 million in Swiss bank accounts.

Juergen Homann faces a maximum sentence of five 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.” Additionally, Homann has agreed to pay a civil penalty of 50% of the highest balance contained in the UBS account.

All that for something that thousands of Americans have done.

DOJ: According to court documents and statements made in court, Homann failed to file an F-BAR for calendar year 2007. Homann also failed to report his account at UBS AG in Switzerland on his individual income tax return for that year. Additionally, Homann failed to report income earned on his UBS bank account. The UBS account, originally opened in the late 1980’s in the name of a Liechtenstein foundation, was transferred into the name of ELM Finance Limited, a nominee Hong Kong corporation. Homann established ELM with the assistance of Swiss lawyer, Matthias Rickenbach, who was indicted in August 2009 for conspiring to defraud the United States. From 2001 through 2008, Homann held approximately $6.1 million in assets in the ELM account at UBS in Switzerland.

According to court documents and statements made in court, in 2005, Homann, with the assistance of Rickenbach and a Swiss banker, conducted a sham loan by transferring $5 million from an account in the name ELM Finance Limited to a second Hong Kong entity in order to obtain financing for Homann’s U.S. business without alerting authorities that he controlled the assets in the ELM at UBS. Further, Rickenbach and a Swiss banker persuaded the defendant not to seek out and enter into the IRS’s Voluntary Disclosure program.

That comes on the heels of other succesful IRS cases.

  • In June 2009, UBS client Steven Michael Rubinstein, a Boca Raton, Fla., accountant, pleaded guilty to filing a false tax return.
  • In April 2009, another UBS client, Robert Moran, a Ft. Lauderdale, Fla., yacht broker, pleaded guilty to filing a false tax return.
  • In July 2009, UBS client Jeffrey Chernick of Stanfordville, N.Y., pleaded guilty to filing a false tax return.
  • In August 2009, UBS client John McCarthy, a resident of Malibu, Calif., pleaded guilty to failing to report his ownership of and interest in a foreign financial account.

“As the IRS voluntary disclosure program enters its final few weeks, those who are hiding income and assets in offshore accounts would be well-advised to promptly come in and come clean before the government learns about their accounts through other channels,” said John A DiCicco, Acting Assistant Attorney General of the Justice Department’s Tax Division. “Those who think they can ‘stay below the radar’ face a real risk of prosecution and jail if convicted, and they will still owe the taxes due, together with interest and civil penalties.”

You’ve got until October 15th, folks.

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.