Two HSBC clients sentenced in U.S. for tax evasion

Two HSBC clients sentenced in U.S. for tax evasion

Sunday, February 06 2011 @ 07:47 AM EST
Contributed by: Don Winner
Views: 145
By Kevin Gray MIAMI (Reuters) – A father-and-son team of Miami-based property developers was sentenced to 10 years in prison on Friday for failing to report more than $49 million of income in a case that marked the first trial since the start of an intensified U.S. crackdown on offshore tax evasion. Mauricio Cohen and his son Leon Cohen Levy, clients of HSBC Holdings Plc (HSBA.L), Europe’s largest bank, were convicted in October of using shell entities and offshore tax havens to hide more than $150 million in assets from the U.S. Internal Revenue Service. A federal judge in Fort Lauderdale, Florida, handed down the sentence. “The IRS is vigorously pursuing unreported income in hidden offshore accounts,” Victor Song, the head of the IRS Criminal Investigation unit, said in a statement. “We urge citizens to consider whether tax fraud is worth the price of going to jail.”
The sentencing came after U.S. authorities last year ended their probe of Switzerland’s UBS AG (UBSN.VX) (UBS.N), which admitted helping thousands of wealthy Americans evade taxes through offshore accounts. Since the settlement of the UBS case, the U.S. government has said it would pursue other banks if it found similar wrongdoing. It sent letters to some HSBC clients, notifying them that they were targets of a criminal probe. Previous tax evasion cases, after UBS became the focus of U.S. efforts to crack down on financial firms helping Americans hide income, have ended in plea agreements, officials say.

“NOT OBLIGATED TO PAY TAXES” – The Cohens, who owned and operated several hotels under the Flatotel brand, were arrested in New York in April and later found guilty of conspiring to defraud the United States and filing false tax returns. Mauricio Cohen, 77, and Leon Cohen-Levy, 46, are Spanish citizens. According to court documents, the Cohens’ crimes included failing to pay taxes on the sale of a New York hotel over 10 years ago which generated proceeds of $33 million. Most of the money was eventually routed through bank accounts belonging to tax haven shell companies based in the Bahamas, Panama and other locations, and the income was never reported on U.S. tax returns by the Cohens or any of their related businesses or entities, prosecutors said in documents presented in the case. The Cohens also stole and used the identities of employees and relatives to open and operate accounts, prosecutors said.

At the time of their arrest, the Cohens told authorities they had combined assets of just over $15,000. “The defendants have maintained the fiction that they are penniless and not obligated to pay United States taxes,” a court document presented by the prosecution said. “They maintain this fiction despite living in multimillion dollar homes, driving luxury vehicles, vacationing on yachts, getting through traffic in a helicopter and being chauffeured in a limousine,” it said. The case in U.S. District Court, Southern District of Florida, is United States of America v. Mauricio Cohen Assor and Leon Cohen Levy, 10-CR-60159. (Editing by Gerald E. McCormick and Robert MacMillan)

Editor’s Comment: One sentence leaped out at me from this article – “The Cohens also stole and used the identities of employees and relatives to open and operate accounts, prosecutors said.” Please, be very, very careful when signing any kind of documents related to opening a Panamanian corporation or bank accounts here. The vast majority of business partnerships that start off with a sloppy kiss and a honeymoon often end with a right -cross and a nasty legal divorce. Don’t forget what signatures you left behind on things, because you might find yourself talking to some not-so-happy IRS dudes at some time in the future.

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9 Responses to “Two HSBC clients sentenced in U.S. for tax evasion”

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    Interesting about a special rlpionsibesty for us privileged welfare state people up north. Remember the criticism from rightwingers against Sweden as the world’s conscience’, udner Olof Palme.And the worldb4s happiest people’ isn’t that the Danes happy with themselves, self-sufficient ? Is that what w e are also?

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