Victor Lipukhin is a Russian national who is also a U.S. green card holder. His business accomplishments are many and include serving as president of Severstal USA, a steel company headquartered in Elgin, United States. He also ran several property leasing companies in the Chicago area. Now Lipukhin has something new to add to his resume, defendant.
The Justice Department and IRS have charged Lipukhin with four felony counts of filing false tax returns and attempting to interfere with the IRS. If convicted of all counts, Lipukhin faces 12 years in prison.
What is interesting about this case is the decision to charge Lipukhin. His charges relate to conduct that occurred between 2002 and 2006. According to the indictment, Lipukhin moved back to Russia in 2007.
Prosecutors say that while living and working in the U.S., Lipukhin opened an undeclared nominee account at Swiss bank UBS. The account contained $47,000,000. Rather than open the account in his own name, Lipukhin allegedly opened the account under the name Old Orchard, a Bahamian nominee entity.
The indictment says that Lipukhin’s foreign accounts were never reported to the government. Owning a foreign account is completely legal if properly reported. Taxpayers must report foreign accounts on their individual income tax return and on a Report of Foreign Bank and Financial Accounts (FBAR).
Willful failure to file an FBAR is a felony. The government believes that foreign accounts held under a nominee name are evidence of willful intent. Nominee entities are accounts opened in a fictitious name. While it is totally legal to open accounts in business names, the IRS takes a dim view if an account is opened under a phony name or titled to an entity that has no valid business purpose.
The takeaways from this case are several.
First, the government is extremely aggressive in prosecuting those that hold foreign accounts under a third party or nominee name. If you hold bank, brokerage or other financial accounts under a false name and those accounts are not properly reported, contact an experienced FBAR lawyer immediately.
This case also shows that the government will pursue individuals anywhere in the world and without regard to whether they are citizens. Even though Lipukhin was only a green holder and left the U.S. almost a decade ago, he was still indicted. Some of the criminal conduct he is accused of dates back 12 years.
Remember that an indictment is only a finding of probable cause. Victor Lipukhin, like all defendants, is presumed innocent until proven guilty.
The government has become extremely aggressive in its pursuit of unreported foreign accounts. Reporting a foreign account is easy and can be done electronically. Many taxpayers file FBARs themselves or with the help of an expat tax service or CPA. If you have a year or more of unfilled FBARs or if you have unreported accounts in a nominee name, however, seek the services of an experienced tax lawyer immediately. Even if you aren’t indicted (most folks aren’t), the civil penalties are still tremendous and could wipe most folks out.
Need more information? Contact tax lawyer Bethany Canfield at or by telephone at (414) 223-0464. Initial consolations are free, without obligation and completely confidential.
Post by Brian Mahany, Esq.