A former stockbroker with Beauford Securities pleaded guilty to federal securities fraud. Prosecutors say that Panayiotis “Peter” Kyriacou helped a US citizen evade taxes. The customer was an undercover FBI agent. Beaufort Securities claims to be one of the United Kingdom’s “leading independent private client investment houses.” The brokerage firm and Loyal Bank LTD were also charged in the original indictment.
Based in the UK, Beaufort was registered as a Foreign Financial Institution by the IRS. That allowed it to execute trades in the U.S. and accept payment in the UK. The Foreign Account Tax Compliance Act (FATCA) requires financial institutions such as brokerage firms that operate cross border to be registered with the IRS.
The purpose of FATCA is to insure Americans and green card holders – wherever they may live – report their foreign accounts. The United States is just one of two countries that taxes its citizens on their worldwide income. The IRS believes they can’t properly collect tax unless they know what foreign assets are owned by taxpayers.
Beaufort Securities is headquartered in London. A separate company called Beaufort Management advertised that it helped people create offshore corporations and obtain nominee directors. The management company is based in Mauritius. Everything about Beaufort Management raises red flags for us and is probably what caught the attention of the feds.
A third corporate defendant, Loyal Bank, is located in Saint Vincent and the Grenadines as well as Budapest, Hungry. It bills itself as an “internet-based multicurrency private bank specializing in wealth management, private banking and investment banking.” More red flags.
There is nothing wrong with an American opening an account in a tiny island archapelgo measuring 150 square miles and a population of 110,000. Ditto for having a company located in east Africa opening create a business for you that isn’t your name and has directors that you never met. Put all these things together, however, and Uncle Sam is going to get very suspicious. And did.
The feds say Kyriacou and several others devised an elaborate scheme to defraud investors in the United States. Their scheme generated lots of money which had to be laundered. While investigating a similar scheme based in Belize, FBI agents intercepted a call on a wiretap involving Beaufort Securities.
The Brits stepped in an found that Beaufort Securities had deficient anti-money laundering controls. That was in 2014. The firm promised to implement remedial actions to prevent their accounts from being used by crooks.
They didn’t. And in fact, one of their own brokers – Panayiotis “Peter” Kyriacou – was part of the gang of crooks.
The feds found an informant in 2016 and began recording phone calls with Kyriacou. The informant said he had wealthy US clients who wanted to invest through Beaufort Securities. At first Kyriacou was wary. He said no because of the FATCA reporting requirements. But soon he succumbed to the lure of easy money.
The informant introduced Kyriacou to an undercover FBI agent who said he had millions of dollars of trades he wanted to do but wanted to conceal those trades from the SEC.
Kyriacou was happy to help. Evidently he was not acting alone as several of his colleagues at Beaufort were allegedly doing the same thing.
Kyriacou and the others were indicted in February of 2018. This month Kyriacou pleaded guilty in a Brooklyn courtroom. When sentenced next year he faces up to 10 years in prison.
In a separate complaint, Kyriacou and Beaufort Securities were also charged by the Securities and Exchange Commission.
FATCA Whistleblower Eligible for IRS and SEC Rewards
Kyriacou got caught by sheer luck. The feds were investigating a different scheme when they stumbled across Kyriacou on a wire tap. How many of these schemes take place every day?
The best sources of information for offshore tax scams are insiders; the people who work inside these corrupt companies. Stepping up and reporting these companies helps fight greed and corruption, helps ensure that everyone pays their fair share of taxes. It’s also the right thing to do. And the best part? Under U.S. whistleblower programs, you can also get paid for your information.
IRS FATCA Whistleblower Rewards
The primary whistleblower program for FATCA violations is the IRS Whistleblower Program. If you have information about high net worth individuals or companies violating FATCA and not paying their fair share of taxes on offshore income, you may be eligible for a cash reward of up to 30% of whatever the IRS collects from the wrongdoers.
In most instances the IRS can keep your name confidential meaning the wrongdoers never know who reported them.
SEC Whistleblower Rewards
This case shows that sometimes the SEC can get involved. The Commission was involved in this case because foreign actors were attempting to defraud American investors and doing so through securities and the stock market.
We like the SEC Whistleblower Program because anonymous reports are allowed meaning there is even less risk of the wrongdoers finding out who blew the whistle. And like the IRS program, rewards of up to 30% of what the government collects from wrongdoers are available.
You do not need to be an American citizen or resident to collect a reward under either program.
To learn more, please visit our IRS offshore fraud whistleblower and SEC whistleblower pages. Ready to see if you qualify for FATCA whistleblowers rewards? Contact us online, by or by phone at 202-800-9791. We also invite you to review our FATCA IRS whistleblower reward information page.
We accept cases worldwide. Our fees are based on a contingency or “success” fee meaning we only get paid if you get paid. All inquiries are protected by the attorney – client privilege at kept strictly confidential (even if you never hire us).