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Criminal Enforcement Round Up: October Yields a Trio of High-Profile Money Laundering Charges With International Focus

By Alexa L. Levy on October 30, 2020

Posted in 18 USC 1956, Beneficial Ownership, Bribery, Casino, Conspiracy, Criminal Enforcement, Department of Justice (DOJ), Extraterritorial Application of US Law, Intent to Conceal, Intent to Promote, Internal Revenue Service (IRS), International Tax Evasion, Narcotics Financing, Offshore Account, Proceeds, Report of Foreign Bank and Financial Accounts, Specified Unlawful Activity, Undercover Investigations, Virtual Currency

DOJ Charges a U.S. Billionaire, an Alleged International Drug Conspiracy Using Chinese Bank Accounts and a Guatemalan Casino, and a Former Top Mexican Official in the “War on Drugs”

The term “October Surprise” garnered new meaning this year among money laundering enthusiasts with the announcement of three major indictments. All three announcements came on October 15 – at the midpoint of a month of news cycles otherwise dominated by the upcoming United States presidential election. Although these three indictments are all very different from one another in many ways, they all share a core element: the cross-border transfer of allegedly dirty money.

“Largest Ever U.S. Criminal Tax Charge” Bring Money Laundering Charges as Well

The Department of Justice (“DOJ”) unsealed a 39-count indictment returned by a federal grand jury in San Francisco, California, charging billionaire Robert T. Brockman, the Chief Executive Officer of Ohio-based software company Reynolds & Reynolds, with conspiring to defraud the United States, tax evasion, wire fraud, money laundering, failing to file Reports of Foreign Bank and Financial Accounts (“FBARs”), evidence tampering and destruction of evidence. The charges involve an alleged scheme to conceal approximately $2 billion in income from the Internal Revenue Service (“IRS”), which law enforcement officials have said is the largest ever tax charge in the United States. The wire fraud charges do not attempt to “bootstrap” the false tax returns at the heart of the tax evasion scheme into a wire fraud scheme, but rather rest on an alleged scheme to defraud investors in the software company’s debt securities. Still, Brockman’s indictment is yet another example of the potentially powerful overlap of money laundering and tax fraud charges, both of which often implicate the issue of beneficial ownership and the use of shell companies.
Continue Reading Criminal Enforcement Round Up: October Yields a Trio of High-Profile Money Laundering Charges With International Focus

Ballard to Co-Present on Potential Money Laundering and Ethical Risks Faced by U.S. Tax Professionals Serving Foreign Clients Bringing Funds Into the U.S.

By Peter D. Hardy on February 21, 2018

Posted in Attorney Client Privilege, Attorney Liability, Beneficial Ownership, Financial Action Task Force (FATF), Financial Crimes Enforcement Network (FinCEN), Foreign Corrupt Practices Act (FCPA), Internal Revenue Service (IRS), International Tax Evasion, Panama Papers, Report of Foreign Bank and Financial Accounts

I am honored to be part of a panel on March 1, 2018 at the Florida Tax Institute in Tampa, Florida regarding potential money laundering risks, reporting obligations and related ethical issues facing U.S. tax professionals with foreign clients bringing money and assets into the United States. The panel, entitled Working with Inbound Investors & …

Manafort Indictment Alleges High-End International Money Laundering and Tax Fraud Involving Offshore Accounts

By Peter D. Hardy & Marjorie J. Peerce on October 31, 2017

Posted in 18 USC 1956, Bank Secrecy Act (BSA), Conspiracy, Criminal Enforcement, Department of Justice (DOJ), FBAR, Intent to Conceal, Intent to Promote, Internal Revenue Service (IRS), International Tax Evasion, Offshore Account, Proceeds, Real Estate, Report of Foreign Bank and Financial Accounts, Specified Unlawful Activity

Stretch limo parked beside airplane As the world now knows, an indictment against Paul Manafort, Jr., a former campaign chairperson for now-President Donald Trump, and Manafort’s associate, Richard Gates III, was unsealed yesterday. Brought by Special Counsel Robert S. Mueller, the indictment alleges that Manafort and Gates, while working as political consultants and lobbyists, acted as agents of the Government of Ukraine and other foreign entities; failed to properly register and report as such agents; generated tens of millions of dollars from this work; laundered these earnings through various U.S. and foreign entities and bank accounts; and hid these same earnings from the Internal Revenue Service (“IRS”) and the Financial Crimes Enforcement Network (“FinCEN”).

This post will discuss some legal aspects of the specific charges. This post will not delve into any potential political ramifications of the indictment, or speculate as to what the indictment may or may not supposedly reveal regarding the work of the Special Counsel in general. Standing alone, the indictment is a fascinating document for those interested in money laundering and international tax evasion issues, and highlights the potentially powerful overlap of money laundering charges, tax fraud charges, and alleged violations of the Bank Secrecy Act (“BSA”).

In particular, we will discuss:

The charges involving the “international” prong of the money laundering statute, a rarely used charge;
The charges under the BSA alleging failures to file Reports of Foreign Bank and Financial Account, or FBARs – a charge which has become a staple in the government’s decade-long enforcement campaign against international tax evasion and undisclosed foreign accounts held by all sorts of U.S. taxpayers; and
How the indictment’s allegations conform with the recent regulatory emphasis on the alleged use of high-end real estate in the U.S. to launder illicit funds earned abroad.

Continue Reading Manafort Indictment Alleges High-End International Money Laundering and Tax Fraud Involving Offshore Accounts

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