Manhattan U.S. Attorney Announces Arrest Of British Lawyer For Participating In 11-Year Tax Fraud Scheme Involving Swiss Bank Accounts
FOR IMMEDIATE RELEASE
Friday May 11, 2012
Defendant Allegedly Helped American Family Hide $10 Million in Swiss Accounts and Covertly Bring Money into the U.S.
Preet Bharara, the United States Attorney for the Southern District of New York, and Victor W. Lessoff, the Acting Special Agent-in-Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation Division (“IRS-CID”), announced today the arrest of MICHAEL LITTLE, a British attorney, on charges that he participated in an 11-year tax fraud scheme in which he advised and helped an American family to defraud the Internal Revenue Service by hiding at least $10 million in overseas Swiss bank accounts and other means. LITTLE was arrested last night at JFK Airport upon his arrival in the United States, and was presented in Manhattan federal court before U.S. Magistrate Judge Frank Maas this afternoon.
Manhattan U.S. Attorney Preet Bharara said: “In addition to breaking the law by advising his American clients on how to break it themselves, Michael Little violated the most basic moral and ethical tenets of the legal profession. It cannot be said often enough that paying taxes is not optional and that we will prosecute and punish the people who do not do so – along with their enablers.”
IRS-CID Acting Special Agent-in-Charge Lessoff said: “Today’s arrest is another example of the Service’s ongoing effort to crack down on offshore tax evasion. Through our efforts, we are gaining access to more and more information on institutions and individuals involved in offshore tax evasion and you can expect us to use all of our enforcement tools to stop this abuse.”
According to the Complaint unsealed today in Manhattan federal court and other documents in the public record:
LITTLE, a British attorney who resides in England and is licensed to practice in New York, was the attorney for the patriarch of the Seggerman Family, an American family residing in the United States. In August 2001, after the patriarch died, LITTLE met with his beneficiaries and descendants at a hotel in Manhattan, and advised them that the patriarch had left them approximately $10 million in overseas accounts that had never been declared to U.S. taxing authorities. LITTLE then advised the various family members on steps they could take to continue hiding these assets from the IRS. Among other things, he advised them to establish Swiss bank accounts that would be nominally owned or controlled by him and a Swiss lawyer, who was also involved in the scheme. LITTLE also discussed with the family members various methods by which they could bring the money into the United States from the Swiss accounts while evading detection by the IRS. Among other means, he advised family members that they could bring money back to the United States in small increments, or “little chunks,” through means such as traveler’s checks; or by disguising money transfers to the United States as being related to the sales of artwork or jewelry. Various members of the Seggerman family agreed to follow LITTLE’s advice.
Between 2001 and 2008, in accordance with the plan he orchestrated, LITTLE caused undeclared Swiss accounts to be opened and various entities to be created for the purpose of holding and hiding the Seggerman family’s overseas assets. LITTLE also enlisted the assistance of a New Jersey accountant to prepare false and fraudulent individual and corporate tax returns that were signed and filed by various Seggerman family members and the entities they controlled. LITTLE also caused millions of dollars to be sent surreptitiously from the undeclared Swiss accounts to the United States. In addition to the means described above, LITTLE worked with the New Jersey accountant to establish a sham mortgage that allowed one family member to access approximately $600,000 in the overseas assets. LITTLE also facilitated the transfers of money from the Swiss accounts to London, England, where Seggerman family members then picked up the funds while on trips there, and brought all or part of it back to the United States as cash, generally in amounts less than $10,000. Members of the Seggerman family worked out a system of code words, which they used when communicating about LITTLE, the IRS, and the overseas assets. Among other code words, “Small” was code for LITTLE; “Beef” was code for money; “lbs” was a code name for $1,000, and “FDA” was code for the IRS.
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LITTLE, 61, who resides principally in Hampshire, England, and also maintains a residence in Long Island City, New York, is charged with one count of conspiracy, which carries a maximum sentence of five years.
One of the Seggerman family members, Suzanne Seggerman, previously pled guilty in December 2010 to conspiracy to defraud U.S. taxing authorities, and to subscribing to false individual tax returns. Ms. Seggerman, whose case is pending before U.S. District Judge Kevin Thomas Duffy, awaits sentencing.
Mr. Bharara praised the investigative work of the IRS. He also stressed that the investigation is ongoing.
This case is being handled by the Office's Complex Frauds Unit. Assistant U.S. Attorney Stanley Okula and Tino Lisella, an attorney with the Department of Justice’s Tax Division who is designated as a Special Assistant United States Attorney in this case, are in charge of the prosecution.
The charge contained in the Complaint is merely an accusation and the defendant is presumed innocent unless and until proven guilty.