Jan 8 A 79-year-old Florida woman pleaded guilty on Tuesday to criminal charges of tax evasion through accounts at Swiss bank UBS AG, one of the largest such prosecutions in years.
Mary Estelle Curran pleaded guilty in United States District Court in West Palm Beach, Florida, to two charges of filing false tax returns that failed to report her UBS accounts from 2001 to 2007, court papers show.
Curran's UBS accounts used foundations in Liechtenstein and Panama, two tax havens, to conceal money, the Justice Department said in a statement. She faces six years in prison.
At their peak, in 2007, the accounts held more than $42 million, making the case among the largest of its kind.
More than four dozen American clients of Swiss and Swiss-style banks have been charged or indicted in recent years, part of a widening crackdown on offshore tax evasion by the U.S. Justice Department. Over the past four years, the crackdown has ensnared dozens of American clients of overseas banks as well as foreign bankers.
Curran's accounts evaded U.S. taxes of $667,700, court papers show. Under onerous U.S. penalties for failing to report the accounts, Curran agreed to pay a civil penalty of more than $26.6 million, representing 50 percent of the high balance in the accounts. In addition, she owes back taxes of more than $667,700, plus penalties and interest, court papers show.
Curran inherited the accounts from her now-deceased husband of more than four decades, said her attorney, Nathan Hochman, a tax lawyer at Bingham McCutchen and former assistant attorney general for the Justice Department's tax division in 2008.
In February 2009, Curran, attempted to enter a voluntary disclosure program with the Internal Revenue Service that would have allowed her to pay reduced fines and penalties. She was not accepted.
At the time, UBS, under criminal investigation for its work selling tax-evasion services to wealthy Americans, had disclosed Curran's name to the American authorities, Hochman said in a telephone interview with Reuters. That month, UBS entered into a deferred prosecution agreement, agreed to pay a $780 million fine and later turned over more than 4,000 additional client names.
Taxpayers whose identities become known to the IRS before the clients come forward voluntarily are generally not eligible for the reduced fines and penalties.
"The Justice Department continues to pursue those who hide income and assets from the IRS through the use of nominee businesses and offshore bank accounts," Assistant Attorney General Kathryn Keneally said in a statement.
"U.S. taxpayers who fail to come forward in the voluntary disclosure program risk prosecution and substantial fines, as this case demonstrates."
Hochman said by telephone Curran "has taken full responsibility for her actions" and that her attempt to voluntarily disclose the inherited accounts, coupled with what he termed her lack of financial sophistication, should be factors in her sentencing.
"She didn't use this money," Hochman said. "She didn't need it." (Editing by Christopher Wilson)