A lawyer who advised a wealthy family on how to defraud the IRS of $14 million via Swiss bank accounts has been convicted.
A UK-born lawyer, licensed to practice in New York, has been convicted by a jury of advising an American family how to cheat the Internal Revenue Service from around $14 million via Swiss bank accounts.
Michael Little was convicted earlier this month by a federal jury on charges of taking part in the tax fraud scheme that lasted 11 years. As well as using offshore Swiss accounts, Little failed to file his own personal tax returns and helped to file false returns, the Department of Justice said in a recent statement. The verdict followed a three-week trial before US District Judge P Kevin Castel.
Sentencing of Little is due to take place on September 6, 2018, the DoJ said.
“Michael Little assisted an American family in evading taxes on $14 million in undeclared offshore inheritance money. Over the course of a decade, he helped the family illegally funnel millions of dollars of that inheritance from Swiss bank accounts into the United States, in order to avoid IRS detection,” US Attorney Geoffrey S Berman said.
The case throws light on the sort of activities that authorities have tried to stamp out in recent years, intensifying after the 2008 financial crisis. Swiss banks such as UBS and Julius Baer have ceased to provide Americans with offshore bank accounts. The US and Switzerland have signed a pact under which dozens of Swiss institutions paid financial settlements to the DoJ in exchange for non-prosecution agreements. In 2010, the US enacted the Foreign Account Taxation Compliance Act to catch expat US tax evaders.
Explaining the case, the DoJ said Little was a was a business associate of the patriarch of the Seggerman family, an American family residing in the US. In August 2001, after the patriarch died, Little and a lawyer from Switzerland met with his widow and adult children at a hotel in Manhattan, and advised them that the patriarch had left them approximately $14 million in overseas accounts that had never been declared to US taxing authorities.
Little and this Swiss lawyer also advised the various family members on steps they could take to continue hiding these assets from the IRS. For example, Little discussed how to bring money into the US from Swiss accounts, without being detected by the IRS. Ploys included disguising money transfers as being linked to sales of artwork and jewelry.
In or about 2010, Little became aware the IRS had launched a criminal probe into his actions. To cover his tracks, he told a tax attorney and an accounting firm that had prepared the widow’s individual tax returns. Little gave false information to the tax lawyer and the accounting firm about the nature of the transfers from the Swiss account to the US, saying they represented “pure gifts” from a non-US person who had “absolutely no relationship” to the widow.
Little had been a lawful permanent resident of the US since 1972.