Portola Valley Man Pleads Guilty To Failure To Report Foreign Bank Accounts
SAN JOSE, Calif. – Christopher B. Berg of Portola Valley, Calif., entered a plea of guilty yesterday to willful failure to file the required report of foreign bank account (FBAR) for an account he controlled at United Bank of Switzerland AG (UBS), United States Attorney Melinda Haag announced.
In pleading guilty Berg admitted that in 1999, he began working as a consultant in the furniture industry. In 2000, he met with a Swiss financial consultant and Vice President of Banking at UBS in San Francisco, Calif., regarding setting up a bank account at UBS in Switzerland to shelter a portion of his consulting income from taxation. Beginning in 2001 and continuing through 2005, funds representing $642,069 in compensation earned by Berg from consulting services were deposited by wire transfer to UBS accounts. Berg used the money in these accounts at UBS in Switzerland to purchase a vehicle, to obtain cash while in Europe, and to pay the balance on a Eurocard he used while traveling in Europe. Berg did not disclose the existence of his accounts at UBS in Switzerland to his Certified Public Accountant, and did not disclose the income earned by these accounts or the consulting income deposited to the accounts. The tax harm associated with Berg’s conduct is $270,757.
United States citizens and residents 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 returns. Additionally, U.S. citizens and residents must file an FBAR with the United States Treasury disclosing any financial account in a foreign country with assets in excess of $10,000 in which they have a financial interest, or over which they have signature or other authority.
On Dec. 18, 2012, Berg of Portola Valley, Calif., was charged with one count of Willfully Violating Foreign Bank Account Reporting Requirements. Under the plea agreement, Berg pled guilty to that count.
Berg is scheduled to be sentenced on July 10, 2013, before United States District Court Judge Lucy H. Koh in San Jose. The maximum statutory penalty for a violation of 31 U.S.C. §§ 5314 and 5322(a) is five years in prison and a fine of $250,000. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Trial attorneys from the Department of Justice Tax Division are prosecuting the case. The prosecution is the result of an investigation by IRS - Criminal Investigation.