San Francisco man admits hiding foreign bank account

If you hold assets in a foreign bank account, you are required by law to report these funds to the Internal Revenue Service (IRS). Although many taxpayers have hidden foreign accounts from the government in the past, the government through its Offshore Initiative has drastically increased the identification of those who have offshore bank accounts or assets. With the July, 2014 implementation of the Foreign Accounts Tax Compliance Act (FATCA), it will be extremely difficult for U.S. citizens and permanent residents to keep their offshore accounts concealed. A recent prosecution in San Francisco resulted in a plea to USC7206 False Statement for an individual did not properly declare his bank account in Liechtenstein.

According to a press release from the U.S. Attorney’s office, Richard Chong admitted to failing to disclose his bank accounts on his tax returns. His plea agreement states that “he falsely stated on Schedule B [of his federal income tax return] that he had ‘no’ foreign bank accounts. Chong, in fact, had multiple foreign bank accounts, including an account […] in the Principality of Liechtenstein. Chong admitted that he did not disclose these accounts to the person preparing his income tax returns although he knew he was required to disclose them to the IRS.”

UPDATE 12/22/13:   At the sentencing hearing, Judge Tigar questioned the US Attorney regarding the disparity in sentencing recommendations between Mr. Chong’s case and the Kampfen case.    In   Kampfen,  the Court imposed home detention and a $20,000 fine (over an above the FBAR penalty of 1.5 million).  Here, in Chong, the US Attorney asked for probation only.    Ultimately the court found that the facts of Chong’s case (he had inherited the account as opposed to Kampfen, who intentionally created the accounts) allowed for the disparity.

 

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