NEW JERSEY DOCTOR AND MEDICAL PROFESSOR SENTENCED IN MANHATTAN FEDERAL COURT FOR FAILING TO INFORM THE IRS OF MILLIONS IN SWISS BANK ACCOUNTS
FOR IMMEDIATE RELEASE
Wednesday January 11, 2012
Preet Bharara, the United States Attorney for the Southern District of New York, announced that MICHAEL REISS, a Princeton, New Jersey, doctor, professor, and medical researcher, was sentenced today to eight months in a community confinement center for failing to report Swiss bank accounts that he maintained and controlled to the Internal Revenue Service (“IRS”), as required. Specifically, between 2000 and 2010, he willfully failed to file Reports of Foreign Bank and Financial Accounts (“FBARS”) with the IRS relating to accounts he maintained in Switzerland. In addition to community confinement, REISS was sentenced to one day in prison. He pled guilty in August 2011, and agreed to pay back taxes of at least $400,000 and a civil penalty of over $1.2 million. He was sentenced today by U.S. District Judge Richard M. Berman.
According to the Information and other documents filed in Manhattan federal court and statements made in connection with REISS’s guilty plea and sentencing:
From 2000 until 2010, REISS was required to file an FBAR annually with the IRS for various accounts he held at Swiss banks. He was required to identify the financial institution in which his account was held, the type of account, the account number, and the maximum value of the account during the calendar year for which the FBAR was being filed. He failed to do so for the Swiss bank accounts that he held.
Specifically, in 2000, REISS held an account at UBS AG in Switzerland (“UBS”). In 2002, he transferred the assets in the account to the Swiss branch of another European bank. Later, in September 2003, REISS transferred the assets to an undeclared account at yet another Swiss bank (“Swiss Bank No. 1”). REISS had opened the undeclared account with the alleged assistance of Beda Singenberger, a Swiss financial adviser who was charged in an Indictment returned in the Southern District of New York on July 21, 2011. The undeclared account was opened in the name of the Floranova Foundation, a sham foundation which had allegedly been formed by Singenberger under the laws of Liechtenstein. REISS was the sole beneficiary of the foundation. By opening the account at Swiss Bank No. 1 in the name of the Floranova Foundation, REISS obscured his ownership of the assets in the account from the IRS. As of March 31, 2008, REISS’s account at Swiss Bank No. 1 in the name of the Floranova Foundation account held assets valued at approximately $2.588 million.
In November 2008, again with Singenberger’s alleged assistance, REISS opened another undeclared account at Swiss Bank No. 1. The account was opened in the name of Upside International Ltd., a corporation previously formed by Singenberger under the laws of Hong Kong. The assets of REISS’s account at Swiss Bank No. 1 in the name of the Floranova Foundation were then transferred shortly thereafter into REISS’s Upside International Ltd. account.
For each of the calendar years from 2000 through 2007, REISS filed and caused to be filed with the IRS an FBAR. On each of these FBARs, REISS failed to disclose financial accounts at UBS and Swiss Bank No. 1, as well as an account at the Swiss branch of another bank that he held. For the calendar years 2008 and 2009, REISS did not file an FBAR with the IRS disclosing his signatory or other authority over his account at Swiss Bank No. 1. REISS’s tax returns for the years 2000 through 2009 were similarly false in omitting the information about his Swiss bank accounts.
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REISS, 61, of Princeton, New Jersey, was also sentenced by Judge Berman to three years of supervised release and ordered to perform 30 hours of community service a week for the duration of the period of supervised release. He was ordered to pay restitution of over $458,000 in unpaid federal taxes and interest. REISS previously paid a civil penalty of $1,217,361 for his failure to report the existence of his Swiss accounts to the IRS as required.
The charges against REISS arose out of the ongoing investigation into U.S. taxpayer clients of UBS and other overseas banks who hid accounts from the IRS.
Mr. Bharara praised the work of the IRS, which conducted the investigation. He also thanked the U.S. Department of Justice’s Tax Division for its significant assistance.
The charges against Beda Singenberger are pending, and he is assumed innocent unless and until proven guilty.
This case is being handled by the Office’s Complex Frauds Unit. Assistant U.S. Attorneys David B. Massey and Jason H. Cowley are in charge of the prosecution.