Justice Department officials last month announced the conviction of a prominent New York businessman on several criminal charges related to hidden Swiss bank accounts. According to the criminal complaint, Henry Seggerman was charged with filing a false return, aiding and abetting and conspiracy. The charges all stem from Seggerman’s failure to report the accounts on a Report of Foreign Bank and Financial Accounts – FBAR for short. What makes this case unusual is that the conspiracy appears to have involved 2 generations and 5 members of the Seggerman family.
Prosecutors claim that Seggerman’s father, Harry Seggerman, had originally opened the Swiss accounts. After his death in 2001, Henry and his siblings inherited roughly $24 million. Instead of coming into compliance, Henry elected to keep the accounts a secret. (Back in 2001, the penalties for failure to file an FBAR were minimal. Coming into compliance back then was relatively easy.)
In announcing the guilty plea last month, U.S. Attorney Preet Bharara said, “Henry Seggerman and three of his siblings inherited and continued a family tax fraud scheme. Now, four members of this family stand convicted of tax crimes. We will continue to aggressively investigate and prosecute U.S. taxpayers, and those that assist them, in evading their obligations by hiding money in secret offshore accounts.”
It appears that the government may have had some cooperation from a lawyer that previously represented Seggerman. We have long warned that the Justice Department targets the accountants, lawyers and bankers involved in these missing FBAR cases. Frequently, these folks will cooperate in return for an agreement to not prosecute or a lower sentence. The criminal complaint is partially redacted but indicates that Seggerman’s lawyer is a “co-conspirator not named as a defendant.”
All 4 Kids Charged With FBAR Violations
Seggerman’s siblings Suzanne Seggerman, Yvonne Seggerman, and Edmund Seggerman have already pleaded guilty to similar charges. All face 11 years in prison and massive IRS civil penalties. The total value of the undeclared offshore accounts was approximately $12 million. The civil penalty for failure to file an FBAR is 50% of the highest balance in the account for each year the account was unreported or $6 million per year. In criminal cases, the IRS sometimes assesses penalties for more than 1 year.
Failing to file an FBAR and properly declare foreign accounts is a serious crime. Since 2009, the government has dramatically increased prosecutions in cases where the IRS believes the failure to file an FBAR was willful. Even though the new FATCA bank reporting rules don’t start until next year, the IRS has already proven itself to be very adept at ferreting out undeclared accounts.
Bankers, informants, John Doe subpoenas and tax exchange treaties are just some of the ways the IRS finds unreported Swiss and other foreign accounts.
If you have an unreported foreign bank, brokerage, annuity or precious metals account, speak with an experienced FBAR lawyer immediately. The risk of prosecution, prison and penalties are too great to try and handle by yourself. There are many alternatives including a streamlined reporting procedure for Americans living overseas, an amnesty program (Offshore Voluntary Disclosure Program) and traditional voluntary disclosure options. You must act quickly, however, as amnesty is off the table if the IRS finds you first.
To speak with a lawyer and learn more information about your options and responsibilities, contact us today. Our team of IRS lawyers has helped taxpayers across the world with FATCA and FBAR problems. We usually offer flat fees for our services. Because we handle many of these cases, we can offer our services for less cost than many other tax lawyers.
Post by Brian Mahany, Esq.