California UBS Client Bernard Goldstein Indicted for Hiding Assets in Secret Swiss Bank Accounts

Source- http://www.justice.gov/tax/txdv101327.htm

WASHINGTON - Bernard Goldstein of Carlsbad, Calif., was indicted by a federal grand jury for conspiracy to defraud the Internal Revenue Service (IRS), filing false tax returns and failing to file Reports of Foreign Bank or Financial Accounts (FBARs), the Justice Department and IRS announced today. All the charges are related to Goldstein's hiding hundreds of thousands of dollars of assets in several Swiss bank accounts held at UBS AG. The indictment was returned Nov. 16, 2010, and unsealed today. Goldstein was not present in court today and, according to the indictment, fled the United States shortly after UBS entered into a Deferred Prosecution Agreement with the United States government.

According to the indictment filed in San Diego federal court, Goldstein, a Canadian citizen and lawful permanent resident of the U.S., kept assets in bank accounts with UBS from at least 1992 through at least October 2008. In 1992 he opened a UBS bank account in his own name that held assets totaling more than $2 million at the end of 2000. In 2000 Goldstein, with the assistance of UBS and other co-conspirators, opened another UBS account under the name of a sham Panamanian corporation named Kasler Management Corp. Goldstein then transferred funds from the UBS account in his own name to the UBS account held in the name of Kasler. Goldstein also maintained an account at UBS Cayman Islands Ltd. until 2002, when he transferred assets from the Cayman Islands account to the Kasler account. By the end of 2003, Goldstein's UBS accounts held assets totaling more than $2.5 million, almost all of which were in the Kasler account. Further, in 2004, Goldstein transferred funds to an account at another large global Swiss bank headquartered in Zurich, also held in the name of Kasler.

Goldstein, the owner and operator of MG Export-Import Inc., a California-based company that exported oil pipeline products to Russia, concealed from his tax return preparer the existence of these numerous offshore accounts. Further, he failed to report his ownership of these accounts and failed to report any income earned in these accounts on his tax returns. He also failed to file FBARs relating to the accounts.

A U.S. taxpayer who has an interest in, or signature or other authority over, a financial account in a foreign country with assets in excess of $10,000 is required to disclose the existence of the account on Schedule B, Part III of his or her individual income tax return. A U.S. taxpayer must also disclose the existence of the account by filing an FBAR with the U.S. Treasury.

To further conceal his ownership of the Kasler account, Goldstein's co-conspirators signed IRS forms and UBS's equivalent forms falsely stating that his sham corporation was the owner of his account, when in reality, Goldstein was the owner. Goldstein and his co-conspirators also withdrew cash and transferred assets from and between Goldstein's UBS accounts in order to conceal these assets from the IRS, including the withdrawal of cash from one account after UBS disclosed that it was under criminal investigation by the U.S. government.

Goldstein is charged with one count of conspiring to defraud the IRS, which carries a maximum penalty of five years in prison; five counts of filing false federal income tax returns, each of which carries a maximum penalty of three years in prison; and three counts of willful failure to file an FBAR, each of which carries a maximum penalty of five years in prison.

An indictment merely alleges that a crime has been committed, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt.

"The IRS and Justice Department continue to work cooperatively to combat international tax evasion," said IRS Deputy Commissioner Steven T. Miller. "Individuals who hide income and assets offshore, and those banks and advisors who help them cheat, will find themselves increasingly at risk."

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 U.S. government with the identities of, and account information for, certain U.S. customers of UBS's cross-border business, including Goldstein.


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