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Credit Suisse Said to Hold Accounts for Latest U.S. Tax Felon

Credit Suisse Said to Hold Accounts for Latest U.S. Tax Felon

 By  davidvoreacos

  • Dan Horsky admits using offshore accounts to hide $200 million
  • Horsky agrees to pay U.S. a civil penalty of $100 million

An emeritus professor of business administration in Rochester, New York, pleaded guilty to hiding $200 million in assets from the Internal Revenue Service by using offshore accounts at a bank that people familiar with the matter identified as Credit Suisse Group AG.

Dan Horsky, 71, entered the plea Friday in federal court in Alexandria, Virginia, where he admitted that a Zurich-based bank helped him conceal assets from the IRS, according to the Justice Department. That bank was Credit Suisse, according to three people familiar with the case who asked not to be named because they weren’t authorized to discuss the bank.

“Despite his extraordinary wealth, Mr. Horsky concealed funds offshore, failed to report substantial income, conspired to submit false repatriation documents to cover up his fraudulent scheme, and evaded paying his fair share of tax,” Caroline Ciraolo, a principal deputy assistant attorney general at the Justice Department, said in a statement.

Credit Suisse spokeswoman Karina Byrne didn’t immediately respond to requests for comment. Mark Matthews and Seth Kossman, two attorneys for Horsky, said in a statement: “Mr. Horsky deeply regrets what he did and accepts responsibility for his conduct.”

Horsky signed a plea agreement on June 29, 2015, in which he said he’d cooperate with prosecutors and provide all information he has “regarding any criminal activity requested by the government.”

Horsky is scheduled to be sentenced Feb. 10. He faces as long as five years in prison. If prosecutors are satisfied with his cooperation they will ask the sentencing judge for a reduced term, according to the plea agreement.

Start-Up Investments

Horsky admitted that he began investing in start-up businesses in 1995 through financial accounts at various offshore banks, including the one in Zurich, according to the Justice Department. In 2008, he put money into a company that was bought by another for $1.8 billion. While he received $80 million in net proceeds, he disclosed a gain of only $7 million to the IRS, the Justice Department said. 

Horsky then invested those proceeds using funds from the Zurich-based bank, and his investments, combined with other unreported offshore assets, grew to $200 million by 2013, according to the statement.

Bank representatives regularly communicated with bank employees, and it was “readily apparent” that he was a U.S. resident, according to the statement. Horsky is a citizen of the U.S., United Kingdom and Israel, the Justice Department said.

In 2011, Horsky gave signature authority over the accounts to another individual. That helped him hide the assets from the IRS, the government said.

Horsky filed false tax returns from 2008 to 2014, failing to disclose his income from the Zurich bank’s accounts, resulting in a tax loss of at least $10 million, the U.S. said. He also failed to file Reports of Foreign Bank and Financial Accounts, or FBARs, until 2011, and false ones in 2012 and 2013, according to the Justice Department.

Horsky paid an FBAR penalty of $100 million, which is separate from any other restitution he may face, the department said.

The case is U.S. v. Horsky, 16-cr-224, U.S. District Court, Eastern District of Virginia (Alexandria).

https://www.bloomberg.com/news/articles/2016-11-04/ex-professor-pleads-guilty-to-hiding-200-million-from-irs

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