Accountants accused
How do accountants end up at the wrong side of the fence? Probably just as most others do. Financial professionals offer services that are very attractive to professional money launderers and criminals that do “do it yourself laundering”. Who will set up companies in tax friendly jurisdictions? Who will think of a tax scheme to justify all financial flows to and from exotic places? No doubt that some accountants and tax consultants have the knowledge to assist. And some do… a few knowingly, most unknowingly.
Remember Madoff’s accountant? Arrested in March 2009. In May 2009, a Californian accountant was arrested for running a $734k Ponzi scheme.
Today DOJ announced that BDO Seidman accountants were indicted for tax fraud, generating over $ 7 billion of fraudulent tax losses. Two bankers of a foreign bank, based in Manhattan, were also involved.
They allegedly set up a “cookie cutter” model for deductible tax losses that clients could use to minimize their tax liability. Around 900 clients used their fraudulent schemes to defraud the IRS.
From 1994 through 2004, the seven defendants and others participated in a scheme to defraud the IRS by designing, marketing, implementing and defending fraudulent tax shelters. The conspirators sought to deceive the IRS about the bona fides of those shelters and the circumstances under which the shelters were marketed and implemented.
In order to maximize the appearance that the tax shelters were investments undertaken to generate profits, and to minimize the likelihood that the IRS would learn the transactions were actually designed to create tax losses and deductions, the defendants and their co-conspirators created and assisted in creating transactional documents and other materials that falsely and fraudulently described the clients’ motivations for entering into the tax shelters and for taking the various steps that would yield the tax benefits.
The DOJ warns financial professionals of their responsibility to keep the financial industry clean:
“Dishonest and fraudulent tax professionals, including accountants, attorneys, and bankers, should stand up and take note of today’s indictment,” said John A. DiCicco, the Acting Assistant Attorney General of the Justice Department’s Tax Division. “Professionals who sell and promote fraudulent tax shelters that help wealthy clients illegally evade taxes face serious felony charges and substantial prison time.”
http://www.usdoj.gov/opa/pr/2009/June/09-tax-569.html
http://www.austrac.gov.au/files/typ_2008_cs25.pdf
