For over 50 years, Bloomberg Tax’s renowned flagship daily news service, Daily Tax Report® has helped leading practitioners and policymakers stay on the cutting edge of taxation and...
By Alison Bennett (Bloomberg BNA)
The extensive nature of Paul Manafort’s indictment for failing to report tens of millions in offshore accounts means an investigation may have started well before Special Counsel Robert Mueller took it over, a criminal tax attorney told Bloomberg Tax.
Manafort, President Donald Trump’s former campaign manager, and his business partner Richard Gates III were indicted Oct. 27, the first charges filed in Mueller’s investigation of Russia’s ties to the 2016 presidential election. The election wasn’t mentioned in the 31-page indictment ( United States v. Manafort , D.D.C., No. 1:17-cr-00201, indictment 10/27/17 ).
“It’s a very detailed indictment and not all indictments are that detailed. It’s a signal that they’ve been working on this for quite some time,” Steven Toscher of Hochman Salkin Rettig Toscher & Perez P.C., said Oct. 30.
Manafort and Gates surrendered to authorities Oct. 30 on tax and conspiracy charges, and later pleaded not guilty to all charges. Both were placed under house arrest.
The indictment alleges that Manafort “unlawfully, willfully, and knowingly” failed to file Report of Foreign Bank and Financial Accounts (FBAR) forms for 2011 to 2014. The accounts were used to launder money he earned working for Ukrainian politicians with ties to Russia in undisclosed lobbying efforts, it says.
Toscher said the document shows that the government is taking its nine-year crackdown on Americans hiding money overseas to a new dimension.
FBAR violators are typically “people using offshore accounts to hide the earning of income. This obviously is much more involved than that,” Toscher said. “These are charges of tax fraud and conspiracy against the United States. My reading of the indictment is that the monies earned working for the government of the Ukraine were not reported on any tax return.”
According to the indictment, Manafort and Gates engaged in schemes to use the offshore accounts—through which more than $75 million passed—without paying taxes on the money. It says millions of dollars in wire transfers were made to the U.S. Manafort is accused of laundering more than $18 million, allegedly to buy property, goods, and services.
The document alleges that Manafort failed to file the required FBARs—on which taxpayers must report foreign accounts of $10,000 or more. Gates didn’t file the required disclosures for 2011 to 2013, the indictment says.
In addition to the charges for failing to file FBARs, the indictment includes allegations of conspiracy, money laundering, being an unregistered agent of a foreign principal, and making false and misleading statements.
Caroline Ciraolo, also a partner at Kostelanetz & Fink and a former acting assistant attorney general in the Department of Justice Tax Division, said the case is further proof of “a steady drumbeat of investigations and prosecutions with regard to secret foreign accounts and assets.”
Although she couldn’t comment directly on the Manafort case, Ciraolo warned that the government “has gained a tremendous amount of expertise. The landscape has changed dramatically.” She emphasized recent comments by Internal Revenue Service Criminal Investigation Chief Don Fort that his division is forming a unit that specializes in international tax crimes.
A spokesman for the special counsel’s office didn’t immediately respond to a request for comment.
With assistance from Andrew Harris in Washington (Bloomberg).
To contact the reporter on this story: Alison Bennett in Washington at email@example.com (Bloomberg BNA)
Text of the indictment is at http://src.bna.com/tMV.
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)