Two Phoenix-area businessmen have been convicted of filing false federal income tax returns by concealing millions of dollars of assets in several secret Swiss bank accounts.
On April 12, 2013, the U.S. Department of Justice (DOJ) announced that a jury convicted Stephen M. Kerr and Michael Quiel on federal tax charges originating from their failure to disclose secret Swiss offshore bank accounts. Mr. Kerr was also convicted of two counts of failing to file a Report of Foreign Bank and Financial Accounts (FBAR). On Feb. 6, 2013, California attorney Christopher M. Rusch, who had conspired with Messrs. Kerr and Quiel, pled guilty to conspiracy to defraud the government and failing to file an FBAR.
According to evidence presented at trial, Messrs. Kerr and Quiel, established nominee foreign entities and corresponding bank accounts at UBS AG and Pictet & Cie to conceal their ownership and control of stock and income that were deposited into these offshore accounts. Mr. Rusch testified for the prosecution at trial, admitting that he helped facilitate the sale of the shares of stock through the undeclared accounts. Mr. Kerr also engaged Mr. Rusch to sell 11.4 million shares of stock held in the name of a controlled foreign entity and transfer the proceeds from the sale of the stock to an UBS account.
The DOJ press release quotes Chief IRS-Criminal Investigator, Richard Weber, as saying:
"Clients, as well as promoters, of international tax fraud are under the watchful scrutiny of the IRS... Mr. Kerr and Mr. Quiel disregarded their legal responsibility to file true and accurate tax returns reporting all their income and interest. They now face substantial monetary penalties and the risk of incarceration."
U.S. taxpayers are required to file FBAR forms when they have a financial interest in or signature authority over one or more foreign financial accounts with an aggregate value greater than $10,000. Additionally, U.S. taxpayers must disclose signature authority or an interest in a financial account in excess of $10,000 in a foreign country on Schedule B, Part III, of their individual income tax returns
Sentencing for Mr. Kerr and Mr. Quiel is scheduled for June 25, 2013.