FOR IMMEDIATE RELEASE|
WEDNESDAY, MARCH 31, 2004
TDD (202) 514-1888
FORMER HAWAII LEGISLATOR PLEADS GUILTY TO PARTICIPATION
IN OFFSHORE TAX EVASION SCHEME
WASHINGTON D.C. - Eileen J. O’Connor, Assistant Attorney General for the Tax Division, United States Department of Justice; Edward H. Kubo, Jr., United States Attorney for the District of Hawaii; and Nancy Jardini, Chief, Internal Revenue Service Criminal Investigation, announced today that Nathan H. Suzuki, who was a member of the Hawaii House of Representatives and its Finance Committee at the time of his indictment in June 2002, pled guilty to the charge of conspiracy to defraud the Internal Revenue Service from June 1993 through February 2000.
The trial of Mr. Suzuki, who is a licensed Certified Public Accountant, income tax preparer, and real estate agent, was scheduled to begin this week in federal court in Honolulu. Sentencing of Mr. Suzuki has been scheduled for July 28, 2004.
"Everyone is expected to comply with the tax laws," said Assistant Attorney General Eileen J. O’Connor. "Professionals and elected officials who commit crimes can expect to be prosecuted by the Department of Justice."
"The IRS has made the investigation of individuals who intentionally hide income from the government, such as through offshore corporations and bank accounts, a national priority. And today's guilty plea speaks strongly to the government's successful efforts to stop this type of fraud," said Nancy Jardini, Chief, IRS Criminal Investigation. "Tax evasion is not a victimless crime. The honest, hardworking American taxpayer pays the price for these scams against the government."
Mr. Suzuki admitted that he was employed until 1994 as comptroller of Hawaiian Isles Enterprises, Inc. (HIE), a company owned by his co-conspirator, Michael H. Boulware. Until 1994, he also prepared Mr. Boulware’s income tax returns. HIE and its related entities generate gross sales of approximately $80 million dollars per year and are engaged in the sales of tobacco, coffee, and vending machine products throughout the State of Hawaii.
Mr. Suzuki admitted, in his plea agreement and open court, to his role in creating offshore corporations and bank accounts in the Kingdom of Tonga and the Hong Kong Special Administrative Region (HKSAR). The corporations and bank accounts were intended to obstruct a criminal investigation being conducted by Internal Revenue Service. Mr. Suzuki admitted that Mr. Boulware transferred approximately $3 million dollars belonging to HIE to the Hong Kong accounts. The concealed funds included monies earmarked by Mr. Boulware for an unsuccessful attempt to purchase a bank in Ecuador.
Mr. Suzuki admitted sending faxes in furtherance of the scheme from his fax machine located at the Hawaii State Legislature. The plea agreement states that Mr. Suzuki knowingly obstructed an effort by the United States to obtain records from the Kingdom of Tonga. He admitted filing a lawsuit in Tonga to block the discovery of bank records, after having been ordered by a federal judge to sign a directive authorizing the records’ release.
Mr. Suzuki further admitted that he filed false income tax returns for the years 1995, 1996 and 1997, failing to disclose his interest in and authority over the foreign-based financial accounts. He also failed to file with the United States Department of the Treasury, Forms TD F 90-22.1 ("Report of Foreign Bank and Financial Accounts") as required by law.
A violation of 18 U.S.C. § 371 carries a maximum penalty of five years imprisonment, a $250,000 fine, or both, and three years of supervised release following imprisonment.
On November 29, 2001, after a jury trial, Mr. Boulware was convicted on nine (9) counts of tax evasion and filing false tax returns. The indictment charged him with failing to report as income nearly $10 million diverted from HIE during the tax years 1989 through 1997. Mr. Boulware was sentenced to spend 51 months in prison.
Assistant Attorney General O’Connor and United States Attorney Kubo thanked Tax Division Trial Attorney Edward E. (Ted) Groves, who prosecuted both cases. They also thanked the special agents of the Internal Revenue Service, whose assistance was essential to the successful investigation and prosecution of these complex cases.