Thoughts on the Manafort & Gates Indictment: Focused on FBAR Violations

FBAR, Manafort and Gates indictmentOn Monday, October 30, 2017, Special Counsel Robert Mueller unsealed the indictment against former Trump campaign chairman Paul Manafort and his business associate, Richard Gates. The twelve count indictment (available here) charges Manafort and Gates with multiple offenses relating to the pair’s alleged advocacy on behalf of the Government of Ukraine and Ukrainian political parties and the treatment of funds received in connection with these activities.

In particular, the indictment alleges that Manafort and Gates, acting through foreign nominees, opened numerous offshore bank accounts and deposited some $75 million in proceeds from their Ukraine-related work into these accounts. Manafort allegedly wired a portion of the funds to the United States, where he used them to buy, inter alia, $849,215 worth of men’s clothing from a single store in a little over five years, $655,500 worth of landscaping services for a Hamptons property, and a $2.85 million condominium in Manhattan.… Read More

Half A Loaf Might Suffice: FBARs, Flora and Federal Jurisdiction

FBARJack Townsend’s excellent blog Tax Crimes covered an interesting case that involved an attempt to challenge a penalty under the Bank Secrecy Act (the “Act”), Kentera v. United States, No. 16-cv-1020-JPS, 2017 U.S. Dist. LEXIS 12450 (E.D. Wisc. Jan. 30, 2017). The Kenteras sought to challenge penalty assessments issued because they failed to file a Report of Foreign Bank and Financial Accounts, which is known as an FBAR, for several years. The FBAR reporting obligation is imposed under the Act. See 31 U.S.C. § 5314. The Kenteras were subjected to a series of penalty assessments for a series of violations; the largest penalty assessment for any year was $10,000, which is the ceiling for non-willful violations.… Read More

Interview with Victor Song, Former Chief of IRS Criminal Investigation (CI)

IRS Buidling

I had the opportunity to speak with the former Chief of Internal Revenue Service Criminal Investigation (CI), Victor Song, about the future of international tax enforcement.  International enforcement has been a top priority for the IRS for many years, and Mr. Song has had a critical role in that effort.  Mr. Song’s tenure with the IRS spanned 30 years. He joined in 1981 and became a special agent in 1983. He rose to the position of deputy chief of CI in 2007, was appointed CI chief in January 2010, and retired from CI in December 2011. Mr. Song then served as the Executive Vice President of Compliance and Advisor to the CEO for Samsung Electronics America; he currently runs Victor Song Consulting, concentrating on services for tax controversy, anti-money laundering, corporate compliance and internal investigations.… Read More