We can learn how to search for assets by studying tax frauds. I say this because tax fraud cases show us the methods people use to conceal their assets. When we study tax fraud cases, we learn to recognize these asset concealment methods. Once we can recognize the methods, we know to look for them each time we perform an search. This is why studying tax fraud cases can help us learn how to search for assets. The suspected tax fraud cases discussed below highlight these methods for hiding assets: cryptocurrency, going offshore and nominees.
The federal court in U.S.A. v. John Does, Index No. 2:22-cv-05715 issued its August 15, 2022 Order allowing the IRS to serve its John Doe summons upon SFOX a.k.a. “OxLabs Inc.” SFOX is a cryptocurrency dealer headquartered in Los Angeles. Although prosecutors do not accuse SFOX of any misconduct, the John Doe summons may help the IRS identify any taxpayers hiding assets through cryptocurrency transactions at SFOX. One court filing in U.S.A v. John Doe, is the July 20, 2022 declaration of IRS Senior Revenue Agent Seng Tchong Lee. Pages 35-44, ¶¶ 93-102 at the July 20th declaration, describe 10 taxpayers with SFOX accounts, who may have used cryptocurrency / virtual currency to commit tax fraud.
II. GOING OFFSHORE
Billionaire Robert F. Smith allegedly used offshore bank accounts & / or offshore trusts to conceal assets from the IRS. This is mentioned at the August 17, 2022 NY Post article “Tax cheat Robert F. Smith bought ranch, ski condos, nightclub with hidden money: report.” Moreover, the article mentions that Mr. Smith reportedly hid his money offshore with the help of Mr. Carlos E. Kepke. Mr. Kepke was a Houston-based tax attorney. Mr. Kepke and Mr. Smith allegedly hid about $225 million from the IRS. In furtherance of this suspected tax fraud scheme, Mr. Kepke supposedly formed a business entity in Nevis and a Belizean trust. Foreign bank accounts in Switzerland and the British Virgin Islands were also reportedly used in the alleged scheme. On April 15, 2021 Mr. Kepke was indicted for his suspected role in this scheme. Mr. Kepke’s trial is currently set down for November 28, 2022, according to Mr. Kepke’s docket report at entry no. 34.
III. NOMINEES (a.k.a. “INTERMEDIARIES)
In U.S.A. v. Baiense, Index No. 22-cr-10148, prosecutors essentially allege between April 2013 through December 2017, Mr. Mauricio Barobosa Baiense committed tax fraud by using subcontractors as his nominees. Mr. Baiense who owned Contract Framing Builders, Inc. (“CFB”), allegedly issued CFB checks worth $11 million to the subcontractors. After the subcontractors reportedly cashed the checks at a check-cashing business, Mr. Baiense may have secretly collected this cash. Then, Mr. Baiense allegedly used the cash as an off-the-books cash payroll to pay wages owed to CFB employees. Consequently, Mr. Baiense’s July 28, 2022 superseding indictment accuses Mr. Baiense of: conspiracy to defraud the United States (18 U.S.C. § 371); failure to collect and pay over taxes (26 U.S.C. § 7202); aiding and assisting the preparation of a false tax return (26 U.S.C. § 7206(2)); and false statements (18 U.S.C. § 1001(a)(2)).
Copyright 2022 Fred L. Abrams