Multiple outlets are reporting that on February 26, 2014, Martin Lack, a Swiss investment adviser and former UBS banker, will plead guilty in the Southern District of Florida to one count of conspiracy to defraud the United States by helping his U.S. customers evade their income taxes. This comes on the heels of the February 6, 2014, announcement of the unsealing of an indictment in the Southern District of New York of Swiss asset manager Peter Amrein for similar conduct.
Lack’s indictment alleges that after leaving UBS in 2003, he began to steer his investment clients into undeclared accounts at UBS and a Swiss cantonal bank. Lack allegedly helped his clients set up secret accounts held in the names of nominee entities, advised them not to keep bank records, and discouraged them from entering the IRS’s Offshore Voluntary Disclosure Program. In one particularly lurid example, Lack allegedly accepted $445,000 in cash in a New Orleans hotel room from one of his U.S. clients.
“This guilty plea shows that the Department of Justice and the IRS are actively mining the voluntary disclosures of U.S. taxpayers to identify advisers who encouraged or assisted tax evasion,” said Jim Mastracchio, co-chair of BakerHostetler’s Tax Controversy practice and chair of the firm’s Criminal Tax Defense group. “People with undeclared foreign bank accounts need to seek counsel, especially if they have tried unsuccessfully to enter the Offshore Voluntary Disclosure Program,” said Mastracchio. Jay Nanavati, a member of the firm’s Criminal Tax Defense group and a former prosecutor at the Department of Justice Tax Division, added, “The fact that Mr. Lack and the government have reached a plea agreement suggests a strong likelihood that Mr. Lack is cooperating and providing the names of his clients and fellow bankers and advisers.”
For more information on the government’s offshore enforcement efforts, FBAR penalties, and the Offshore Voluntary Disclosure Program, please contact Jim Mastracchio at (202) 861-1650 (Jmastracchio@bakerlaw.com) or Jay Nanavati, (202) 861-1747 (firstname.lastname@example.org), Baker Hostetler LLP, 1050 Connecticut Ave., Washington, DC 20036 (www.bakerlaw.com).