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Criminal Indictment Against Alleged Tax Evader

Offshore Account Update

Posted on January 16, 2015 |

A U.S. citizen and Kentucky resident has been indicted for alleged tax evasion. The indictment was recently unsealed and the man who has been charged, Peter Canale, faces a maximum sentence of five years of incarceration. The announcement that the indictment was unsealed was made by the Acting Special Agent for the Internal Revenue Service in New York, as well as by the U.S. attorney for the Southern District of New York.

Canale is not the first U.S. investor to be charged for not declaring offshore accounts, nor will he be the last. The Internal Revenue Service has become very aggressive in going after people who fail to fulfill their tax obligations. In fact, the IRS is seeking to make examples of investors and is vigorously prosecuting those they believe are guilty of tax evasion. Because of the high stakes and the risk of being caught up in an IRS investigation, it is essential for anyone with undeclared offshore accounts to speak with a Boston criminal tax attorney as soon as possible about the options they may have for making voluntary disclosures.

New Criminal Indictment Against Investor Shows Risks of Undeclared Accounts

According to allegations made in the indictment, Canale and his brother inherited an account from a relative that was kept offshore in Switzerland. The brothers met with two Swiss financial professionals and decided that they would not alert the U.S. government to the existence of this undeclared offshore account, which would remain open for the benefit of the brothers.

Later, in 2005, Canale again met with one of the two Swiss financial professionals who had provided assistance with the inherited account. The indictment alleges that Canale was assisted in opening another account, which was opened in the name of a sham corporation in order to conceal Canale’s identity. As of 2009, this account that was opened was valued at an estimated $789,000.

The accounts should have been declared to the government, according to the IRS, and income taxes should have been paid on income that was earned from the offshore investments. Further, U.S. citizens who have money kept offshore must file a Report of Foreign Bank and Financial Accounts (FBAR) every single year in order to be in compliance with U.S. tax rules.  Canale is accused of failing to file his required annual FBARs between the years 2007 and 2010.

The indictment has charged Canale with one count of conspiracy to defraud the government, avoid U.S. taxes and file a false tax return.  The charges are serious and carry the potential for incarceration.

Other investors who have been convicted of having undeclared offshore accounts have also been forced to pay fines that sometimes exceed the actual value of the offshore accounts.

The IRS is taking a tough stance because they want these high profile public prosecutions to act as a deterrent and to encourage other investors with undeclared accounts to come forward. You may be able to participate in a voluntary disclosure program if you have undeclared accounts and you should consult with a Boston criminal tax lawyer for help exploring your options under the law. Let an IRS Attorney with extensive experience in Undisclosed Offshore Accounts help.  Kevin E. Thorn, Managing Partner of the Thorn Law Group, can help limit your exposure to substantial civil penalties and possibly a criminal investigation.

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

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