05/27/2010

News / Miami Beach Hotel Developers Indicted and Charged with Tax Fraud

MIAMI – Mauricio Cohen Assor and his son, Leon Cohen-Levy, each with residences in Miami Beach, Fla., have been charged with conspiring to defraud the United States and filing false tax returns, the Justice Department and the Internal Revenue Service (IRS) announced today. Both defendants have been ordered detained pending trial.

According to court documents, the two men and their co-conspirators used nominees and shell companies formed in tax haven jurisdictions, including the Bahamas, the British Virgin Islands, Panama, Liechtenstein and Switzerland to conceal their assets and income from the IRS. In order to further conceal their assets and income from the IRS, court documents state the men also provided false and forged documents to banks, opened bank accounts in the name of nominees, titled their personal residences and luxury vehicles in the name of shell companies, filed false and fraudulent tax returns, failed to file other tax returns, suborned perjury in a civil matter pending before the New York Supreme Court by directing individuals to testify falsely under oath, and induced other individuals to make false statements to federal law enforcement agents.

According to court documents, Mauricio Cohen Assor and Leon Cohen-Levy were the developers and owners of several residential hotels known by the trade name Flatotel International. In 2000, the defendants sold one of their New York hotels and generated proceeds of $33 million. The income earned from the sale of the hotel was never reported on United States tax returns by the Cohens or by any of their related entities.

According to court documents, among the assets and income the Cohens concealed from the IRS are a $45 million investment portfolio, a condominium at Trump World Tower in New York City that was worth as much as $10 million, the personal residence of Mauricio Cohen Assor on Fisher Island in Miami Beach worth approximately $20 million, the personal residence of defendant Leon Cohen Levy in Miami Beach worth approximately $26 million, the personal residence of the daughter of Mauricio Cohen Assor in Bal Harbor, Fla., commercial properties valued in excess of $55 million in Miami Beach, luxury vehicles, including a Rolls Royce Phantom, a Porsche Carrera GT, a Bentley, a Ferrari Testarossa, a BMW Z8, a Dodge Viper, a limousine and a $1.2 million helicopter.

A criminal indictment merely alleges that a crime has been committed, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the Cohens each face a maximum of 14 years in prison and a maximum fine of $1 million, plus being ordered to pay tax, penalties and interest.

Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, and Acting Assistant Attorney General John DiCicco commended the investigative efforts of the IRS agents involved in this case, as well as Senior Litigation Counsel Kevin M. Downing and Trial Attorneys Mark F. Daly and John E. Sullivan of the Tax Division, and Assistant U.S. Attorney Jeffrey A. Neiman, who are prosecuting the case.

http://www.justice.gov/opa/pr/2010/May/10-tax-618.html

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