US Tax Evasion: No Silva Lining

Posted on KYC360 on 18 February 2010 by Naomi Cohen

Tax investigators widen their search for tax evaders in America in a case involving a Dr Andrew Silva who pleaded guilty to criminal tax evasion Tuesday this week.

In 1997 Dr Silva had inherited a sum of money from his mother that was held in an undeclared bank account held in the name of a sham Liechtenstein Trust in Switzerland. He was repeatedly advised to keep the account quiet by his Swiss lawyers and to send coded letters should he wish to meet with them.

In August 2009 as the UBS case unravelled the bank told him it was closing offshore undeclared accounts of Americans. The lawyer advised against sending a wire transfer of the full sum $268,000, as ‘it would create a trail for US authorities’. Instead he was told to send the money to the US by post over a few weeks so the flurry of mail didn’t look suspicious. He also carried the mail in packages of less than $10,000 to Dulles International Airport in an attempt to avoid the reporting threshold. “Failing to report the transportation of more than $10,000 into or out of the United States is smuggling,” said Scot R. Rittenberg, Deputy Special Agent in Charge for U.S. Immigration and Customs Enforcement (ICE) in Washington, D.C. “ICE continues to work closely with it federal partners to ensure smugglers are held accountable for their crimes.”

In total he sent over 26 packages by post most of which were intercepted. However when questioned by customs officers he falsely declared the reasons for his trips abroad and lied about mailing the money from Switzerland.  He had also failed to report the accounts and the income earned on them . He has since forfeited the $211,200 that was seized from the packages mailed from Switzerland as part of his plea but he could now face up to ten years in jail and further fines of up to $500,000. He will be sentenced on 7 May, 2010.

“Today’s plea shows the continued efforts of the Justice Department to investigate and prosecute those citizens who use offshore accounts to hide income and assets,” said John A. DiCicco, Acting Assistant Attorney General of the Justice Department’s Tax Division. “American taxpayers should rest assured that those who do not file accurate tax returns and who utilize offshore accounts to hide money will be investigated, and when appropriate, prosecuted and sent to jail.”

The UBS case now looks like it may be just the tip of the iceberg.

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