WASHINGTON - An Ohio man residing in Switzerland was charged by information in the Northern District of Ohio for filing false personal income tax returns for the years 2004 through 2008, the Department of Justice announced today. The announcement was made by John A. DiCicco, Acting Assistant Attorney General of the Justice Department’s Tax Division , Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio , and Jose A. Gonzalez, Special Agent-in-Charge from the Internal Revenue Service (IRS) Criminal Investigation in Cincinnati.
According to court records, Edward Gurary, 45, lived in Orange Village, Ohio during the prosecution years. From approximately 2002 through 2008, Gurary owned and controlled a financial account at UBS AG (UBS) which was in the name of a Bahamian entity called Demko, Ltd., and which contained balances ranging from $490,000 to $947,000. Gurary controlled transactions in the Demko account by sending faxes using a code name “Vanda” to UBS from an OfficeMax in the Cleveland area, rather than his home or business. UBS would, in turn, send his requests for authorizations to officers of Demko in the Bahamas in order to make it appear that Demko owned and controlled the account. During the prosecution years, interest was paid by UBS into the Demko account in amounts ranging from $3,400 to more than $21,000.
The information charged Gurary with filing false income tax returns for 2004 through 2008 that failed to report interest income earned on his Demko bank account at UBS. In addition, for three of the years (2004, 2006 and 2007) the information charged Gurary with falsely stating on his Schedule B attached to his income tax return that he did not have signature or other authority over a foreign financial account. Finally, the information described that between 2004 and 2008, Gurary did not file any FBARs or otherwise disclose his Demko account at UBS to the IRS. An FBAR form is a form separate from an income tax return that the law requires taxpayers to file with the IRS every June to disclose additional information about foreign financial accounts over which a taxpayer has signature or other control over, and which had an aggregate value exceeding $10,000 at any time during the year.
An information merely alleges that crimes have been committed, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Gurary faces a maximum of 3 years in prison and a fine of $250,000.
The case is being prosecuted by Assistant U.S. Attorney John M. Siegel and Tax Division Trial Attorney Richard M. Rolwing, following an investigation by the IRS in Cleveland.
Additional information about the Justice Department’s Tax Division and its enforcement efforts may be found at www.usdoj.gov/tax.