An Asset Search, Tax Fraud & Divorce
The financial information supplied by foreign private investigators, suggested that the divorcing husband had hidden marital assets offshore. Other evidence elicited during the divorce, also suggested that the husband might have committed a tax fraud in hiding the marital assets.
As part of my asset search of the husband, (and to learn even more about this suspected tax fraud), I contacted Brian. Brian was a former high-ranking official at the Treasury Department's Financial Crimes Enforcement Network and had earlier been an IRS Special Agent. Brian was going to lead our interview of the husband's business associate, who we were about to meet for the very first time. Right before the interview, Brian identified some of the federal statutes relevant to many tax fraud investigations:
- 26 U.S.C. § 6050I, large cash reporting requirements for trades & businesses (including attorneys).
- 26 U.S.C. § 7201, most commonly applied tax evasion statute (however requires proof of a tax liability).
- 26 U.S.C. § 7203, failure to file a timely tax return.
- 26 U.S.C. § 7206 (1), perjury on a return / false statements, (unlike 26 U.S.C. § 7201, proof of a tax liability is unnecessary).
- 26 U.S.C. § 7206 (2), perjury on a return / false statements, but primarily used against tax return preparers such as accountants and attorneys.
- 18 U.S.C. § 371, conspiracy to commit offense / defraud the United States.
- 18 U.S.C. § 1001, false statements made to the federal government (can apply to any material verbal or written statement, even if unsworn).
- 18 U.S.C. § 1956, money laundering.
- 18 U.S.C. § 1957, money laundering involving property derived from specified unlawful activity.
- 18 U.S.C. § 1961, Racketeer Influenced & Corrupt Organizations ("RICO").
- 31 U.S.C. § 5311 et. seq., the Bank Secrecy Act.
I hoped that Brian and I would learn what the business associate knew about the divorcing husband's hidden assets / suspected tax fraud. As Brian started the business associate's interview he warned: "Once a tax fraud investigation starts rolling along, nobody knows where it may end up".
Copyright 2008 Fred L. Abrams
