May 24, 11

NEWS / New Jersey UBS Client Sentenced for Failing to Report More Than $1 Million in Swiss Bank Account

NEWARK, N.J. – An Oradell, N.J., man was sentenced today to three years of probation – including 12 months of home confinement with electronic monitoring – after admitting he failed to file a Report of Foreign Bank and Financial Accounts (FBAR), concealing more than $1 million in Swiss bank accounts, U.S. Attorney Paul J. Fishman and Principal Deputy Assistant Attorney General John A. DiCicco of the Justice Department’s Tax Division announced.



Harry Abrahamsen previously pleaded guilty before U.S. District Judge Dennis M. Cavanaugh to an information charging him with one count of willful failure to file an FBAR. Judge Cavanaugh also imposed the sentence today in Newark federal court.



According to documents filed in this case and statements made in court, at his plea hearing, Abrahamsen admitted that he failed to file an FBAR for calendar year 2005. Abrahamsen also failed to report his account at UBS AG in Switzerland on his individual income tax return for that year, and failed to report a second account opened in the name of Lucille Abrahamsen Jackson, his daughter. Additionally, Abrahamsen failed to report income deposited in and earned on the UBS bank accounts. The UBS accounts, originally opened in 1992, were transferred into the name of Primrose Properties S.A., a nominee Panamanian corporation, in 2000. Abrahamsen established Primrose in early 2000 with the assistance of a Swiss lawyer and Swiss banker, in order to hide these accounts from the Internal Revenue Service (IRS).



Abrahamsen also admitted that he funded the UBS accounts with approximately $1.3 million in false and inflated expenses paid by his pre-press printing business, SJT Imaging Inc., to a Swiss company. The inflated expenses were then deducted on SJT Imaging Inc.’s corporate tax returns, which allowed Abrahamsen to under report personal income for the years 1999, 2000, 2001, 2002 and 2003.



UBS entered into a deferred prosecution agreement in February 2009, in which the bank admitted to helping U.S. taxpayers hide accounts from the IRS. As part of its agreement, UBS provided the U.S. government with the identities of, and account information for, certain U.S. customers of UBS’ cross-border business.



U.S. citizens who have an interest in, or signature or other authority over, a financial account in a foreign country with assets in excess of $10,000 are required to disclose the existence of such account on Schedule B, Part III of their individual income tax returns. Additionally, U.S. citizens must file an FBAR with the U.S. Treasury disclosing any financial account in a foreign country with assets in excess of $10,000 in which they have a financial interest, or over which they have signature or other authority.



In addition to the term of probation with home confinement, Judge Cavanaugh ordered Abrahamsen to pay back taxes, interest and penalties totaling more than $600,000. As a condition of his guilty plea, Abrahamsen has also agreed to pay an FBAR penalty in excess of $300,000.



Jackson pleaded guilty on Nov. 18, 2010, before Judge Cavanaugh to an information charging her with willfully subscribing to a false tax return and was sentenced yesterday to a year of probation.



U.S. Attorney Fishman and Principal Deputy Assistant Attorney General DiCicco commended special agents of IRS – Criminal Investigation, under the direction of Special Agent in Charge Victor W. Lessoff, for the investigation leading to today’s sentence.



The government is represented by Assistant U.S. Attorney Stacey A. Levine of the U.S. Attorney’s Office Criminal Division and Trial Attorney Michael C. Vasiliadis of the Department of Justice’s Tax Division.

http://www.justice.gov/opa/pr/2011/May/11-tax-669.html

Tags: corporation, criminal investigation, document,