UBS Client Pleads Guilty to Failing to Report Over $1 Million in Swiss Bank Accounts
WASHINGTON - Harry Abrahamsen, a resident of Oradell, N.J., pleaded guilty today to failure to file a Report of Foreign Bank or Financial Accounts (FBAR), the Justice Department and Internal Revenue Service (IRS) announced. In his plea, Abrahamsen admitted that he concealed over $1 million in Swiss bank accounts.
Abrahamsen made his first appearance in federal court and pleaded guilty before U.S. District Judge Dennis M. Cavanaugh to a one-count Information which charges him with willful failure to file a report of foreign bank and financial accounts.
At his plea hearing, Abrahamsen admitted that he failed to file an FBAR for calendar year 2005. Abrahamsen also failed to report his account at UBS AG in Switzerland on his individual income tax return for that year and failed to report a second account opened in his daughter’s name. Additionally, Abrahamsen failed to report income deposited in and earned on the UBS bank accounts. The UBS accounts, originally opened in 1992, were transferred into the name of Primrose Properties S.A., a nominee Panamanian corporation, in 2000. Abrahamsen established Primrose in early 2000 with the assistance of a Swiss lawyer and Swiss banker, in order to hide these accounts from the IRS.
Abrahamsen also admitted that he funded the UBS accounts with approximately $1.3 million in false and inflated expenses paid by his pre-press printing business, SJT Imaging Inc., to a Swiss company. The inflated expenses were then deducted on SJT Imaging’s corporate tax returns, which allowed Abrahamsen to under report personal income for the years 1999 through 2003.
Judge Cavanaugh released the defendant on a $300,000 bond pending sentencing, which is scheduled for July 27, 2010. Abrahamsen faces a maximum potential penalty of five years in prison and a maximum fine of $250,000 or twice the amount of financial gain to the defendant or loss to the IRS. Additionally, Abrahamsen has agreed to pay a civil FBAR penalty based on 50% of the highest balance contained in his UBS account for calendar years 1999 through 2007.
Acting Assistant Attorney General John DiCicco and U.S. Attorney Paul J. Fishman commended the investigative efforts of the IRS agents involved in this case, as well as Trial Attorney Michael C. Vasiliadis, and Assistant U.S. Attorney Stacey A. Levine, who are prosecuting the case.
In February 2009, UBS entered into a deferred prosecution agreement pursuant to 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.
United States citizens who have an interest in, or signature or other authority over, a financial account in a foreign country with assets in excess of $10,000 are required to disclose the existence of such account on Schedule B, Part III of their individual income tax return. Additionally, U.S. citizens much file an FBAR with the United States Treasury, disclosing any financial account in a foreign country with assets in excess of $10,000 for which they have a financial interest in or signature authority, or other authority over.