Jersey/Swiss Financial Services Firm Admits to Conspiring with U.S. Taxpayers to Hide Assets and Income in Offshore Accounts

          LOS ANGELES – Strachans SA in Liquidation has pleaded guilty to conspiring with U.S. taxpayers and others to hide income and assets in offshore entities and bank accounts from the IRS, the Justice Department announced today.

          The now-defunct financial services firm pleaded guilty Monday to one count of conspiracy to defraud the United States and was immediately sentenced by United States District Judge Otis D. Wright II to pay a $500,000 fine.

          According to documents filed in Los Angeles federal court, Strachans was an independent firm providing administration to offshore structures for clients residing in a range of countries, including citizens and residents of the United States. The services provided included the formation of trusts and offshore companies, administration, bookkeeping and accounting. However, Strachans also helped U.S.-based clients hide assets from the IRS and evade taxes by:

• managing undeclared assets for U.S.-based clients that were held by nominee sham entities belonging to the U.S.-based clients;
• facilitating frequent cash collections by U.S.-based clients knowing that they had no intention of declaring the funds to the IRS;
• providing mechanisms for U.S.-based clients to access their undeclared offshore funds in a secret manner, including fake loans, fake consultancy agreements, and dummy invoicing; and
• for a limited number of U.S.-based clients who sought an extraordinary level of confidentiality, holding funds in the personal accounts of Strachans’ shareholders to conceal the true beneficial ownership of funds from the IRS.

          Strachans accepted responsibility for its conduct by pleading guilty, stipulating to the accuracy of an extensive Statements of Facts. The guilty plea is the direct result of Strachans’ voluntary disclosure of its criminal conduct in May 2014, and its full and ongoing cooperation with the Department of Justice in connection with its criminal investigations. Strachans conducted an internal review to identify and collect data and information regarding its U.S.-taxpayer accounts, reported its findings to the department, and provided documentation supporting its findings. Strachans also assisted the Justice Department in preparing treaty requests for information regarding undeclared account holders.

          This matter was investigated by IRS Criminal Investigation.

          This case was prosecuted by Senior Litigation Counsel Nanette Davis and Mark Daly of the Justice Department’s Tax Division, and Assistant U.S. Attorney Robert F. Conte of the Tax Division.