Edward Gurary Pleads Guilty to Failing to Report His Foreign Bank Account at UBS in Switzerland

Source- http://www.justice.gov/opa/pr/2011/March/11-tax-292.html

WASHINGTON - Edward Gurary, formerly of Orange Village, Ohio, pleaded guilty today in federal court in the Northern District of Ohio to filing false personal income tax returns for the years 2004 through 2008, the Justice Department and Internal Revenue Service (IRS) announced. Gurary’s guilty plea was accepted by U.S. District Judge Dan Polster in Cleveland.

According to court documents, Gurary, 45, has resided in Switzerland since 2010, but lived in Orange Village during the prosecution years. Gurary admitted that from approximately 2002 through 2008, he owned and controlled a financial account at UBS AG which was in the name of a Bahamian entity called Demko Ltd. and which contained balances ranging from $490,000 to $947,000. Gurary controlled transactions in the Demko account by sending faxes using a code name “Vanda” to UBS from an OfficeMax store in the Cleveland area rather than his home or business. UBS would in turn send his requests for authorizations to officers of Demko in the Bahamas in order to make it appear that Demko owned and controlled the account. During the prosecution years, interest was paid by UBS into the Demko account, in amounts ranging from $3,400 to more than $21,000, all of which Gurary admitted he failed to report on his tax returns.

According to court documents, Gurary also admitted that for three of the years (2004, 2006 and 2007) he not only failed to report the interest income from his UBS account, but he also falsely stated on his Schedule B attached to his income tax return that he did not have signature or other authority over a foreign financial account. Gurary further admitted that in addition to the account at UBS in Switzerland he also had a foreign financial account with significant assets at Credit Suisse AG. Further, because Gurary did not file any Report of Foreign Bank or Financial Account (FBAR) form or otherwise disclose to the IRS his Demko account at UBS or his Credit Suisse account, he is subject to significant penalties. An FBAR form is a form separate from an income tax return that the law requires taxpayers to file with the IRS every June to disclose additional information about foreign financial accounts over which a taxpayer has signature or other control over, and which had an aggregate value exceeding $10,000 at any time during the year. Gurary agreed to pay a penalty amount of 50 percent of the highest aggregate amount in the two accounts between the years 2002 and 2009, which according to his plea agreement was at least $473,000. At the plea hearing, Gurary tendered a check in the amount of $300,000 made payable to the government and he has agreed to surrender the $200,000 cash bond he already paid on the date of his sentencing. Gurary faces a maximum of three years in prison and a fine of $250,000. Judge Polster scheduled sentencing for June 1, 2011.

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