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Thursday, November 18, 2010

California UBS Client Charged with Hiding Assets in Secret Swiss Bank Account

WASHINGTON – Jeffrey Chatfield of San Diego pleaded guilty before U.S. Magistrate Judge Nita Stormes to a criminal information charging him with filing a false tax return related to a Swiss bank account that he maintained at UBS, the Justice Department and the Internal Revenue Service (IRS) announced today.

The guilty plea is subject to final acceptance by U.S. District Judge Michael M. Anello. Sentencing has been set for Feb. 7, 2011. Chatfield remains free on bail pending sentencing, where he faces a maximum sentence of three years in prison.

According to court documents and statements made in court, Chatfield pleaded guilty to filing a false tax return for 2003 in which he failed to report that he had an interest in or a signature authority over a Swiss financial account at UBS. He also failed to report income earned on this UBS Swiss bank account. In or about 2000, with the assistance of a UBS banker, Chatfield opened a bank account at UBS Bahamas Ltd., in the name of nominee entity Alder West. Chatfield deposited into the account approximately $900,000 in untaxed securities and cash that he received in 2000 from his consulting work, which included advising private companies seeking to go public.

In August 2002, Chatfield closed the Alder West account and with the assistance of his UBS banker and others, formed Iberia West Ltd., a Bahamian nominee entity. Chatfield then opened a new Swiss account at UBS in the name of Iberia West and transferred into that account securities and cash previously held at UBS Bahamas Ltd. In August 2004, Chatfield closed his Iberia West account and transferred all remaining assets to an account at another large global Swiss bank headquartered in Zurich, Switzerland, also held in the name of the nominee entity Iberia West. In 2008, this other Swiss bank told Chatfield that it was closing all accounts held by U.S. taxpayers. Chatfield closed this account in 2008.

Chatfield admitted to filing false tax returns from 2000 to 2008 that concealed his interest in these various offshore accounts and failing to report any income earned from these accounts. Chatfield also admitted that he never filed any reports of Foreign Bank and Financial Accounts

(FBARs) disclosing his interest in any offshore financial accounts. As part of his plea agreement, Chatfield agreed to pay a 50 percent penalty for the one year with the highest balance in his Swiss UBS account in order to resolve his civil liability for failing to file FBARs, Forms TD F 90-22.1.

"This is part of a continuing effort by the IRS and Justice Department to combat international tax evasion," said IRS Deputy Commissioner Steven T. Miller. "These actions send a clear, unmistakable message to anyone who tries to use international borders to evade federal taxes."

In February 2009, UBS entered into a deferred prosecution agreement under which the bank admitted to helping U.S. taxpayers hide accounts from the IRS. As part of their agreement, UBS provided the United States government with the identities of, and account information for, certain U.S. customers of UBS’s cross-border business, including Chatfield.

Acting Assistant Attorney General John A. DiCicco and U.S. Attorney for the Southern District of California Laura E. Duffy commended the investigative efforts of the IRS Criminal Investigation agents who investigated the case and Tax Division trial attorney Timothy J. Stockwell and Assistant U.S. Attorney Yesmin Saide, who are prosecuting the case.

Additional information about the Justice Department’s Tax Division and its enforcement efforts is available at www.usdoj.gov/tax.

Press Release Number: 
Updated September 15, 2014