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CEO Gets Time in Prison for Evading Taxes

Offshore Account Update

Posted on June 26, 2015 |

Federal authorities take tax evasion seriously and are increasingly pursuing criminal charges against those who hid offshore accounts. Just recently, the CEO of Atlanta-based Circlenet, LLC was sentenced to four months incarceration in a federal prison for having undeclared income and offshore accounts that he had not declared.

With crackdowns on offshore banks and bankers, more and more investors are finding that the IRS is learning of their offshore accounts. If you are under investigation by the IRS, you should call a Boston tax attorney as soon as you can to get help responding to the charges so you can try to avoid going to jail.

If you are not under investigation but you have money offshore in accounts you have not de-clared, there is a chance you may face criminal charges in the future.

You have options including participation in an Offshore Voluntary Disclosure Program (OVDP), but you usually have to act before the IRS starts investigating you. Your lawyer can help you to decide on the best course of action to try to protect your money and freedom.

What Led to the CEO's Jail Time?

The CEO of Circlenet who is going to federal prison for four months is named Gregg A. Kaminsky. Kaminsky reportedly had offshore accounts at UBS Bank in Switzerland, as well as at banks in both Thailand and Hong Kong.

Any U.S. citizen with offshore accounts anywhere is expected to file an annual Foreign Bank Account Report (FBAR) with the IRS to alert Treasury to the fact that the offshore account exists. All income that is earned must be declared, even if it is deposited into one of these offshore accounts or if it is earned on an offshore investment. Investors who do not comply with any of these rules can be charged with a crime.

Kaminsky was accused of transferring money into his offshore accounts between 2000 and 2008. Authorities believe he did not report income that was earned in an online virtual world called Second Life. He had almost $1.1 million in his UBS account around 2006. Between 2002 and 2009, he also began to move money from the UBS account into the banks in Hong Kong and Thailand.

The allegations against Kaminsky indicate that his failure to report all income earned made it possible for him to avoid paying taxes on hundreds of thousands of dollars.

He also reportedly completed a FAFSA form to apply for federal financial aid to get an executive MBA at Emory University. Upon submitting the application, he did not report the $500,000 in money he had in his offshore UBS account at the time.

Because of these actions, he was sentenced not just to four months in prison but also to pay restitution of $91,983.

Kaminsky has become one of many who will be imprisoned for tax evasion. Other investors in the future could also face the same fate. If you are concerned that the IRS may come after you, or if you are already under investigation, speak to tax lawyer Kevin Thorn for help.

For a consultation, contact Kevin E. Thorn, Managing Partner, at ket@thornlawgroup.com or (617) 692-2989


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