“One of the Largest Tax Fraud Schemes Ever Uncovered in this Country”
June 5th, 2009
The US government has brought charges against 3 individuals involved in a $1.3 billion tax fraud scheme. From the Los Angeles Times:
Two principals of defunct Seattle investment management firm Quellos Group and a Los Angeles lawyer were indicted in a tax shelter scheme that allegedly created more than $1.3 billion in fraudulent losses for prominent clients, including media mogul and billionaire investor Haim Saban.
The operation was “one of the largest tax fraud schemes ever uncovered in this country,” U.S. Atty. Jeffrey C. Sullivan in Seattle said Thursday.
The article continues:
The indictment names as defendants Los Angeles lawyer Matthew G. Krane, Quellos founder and Chief Executive Jeffrey Greenstein and Quellos principal Charles Wilk, also a lawyer. It charges the two former Quellos principals with conspiracy to defraud the Internal Revenue Service, tax evasion and money laundering, among other charges.
It took the IRS nine years to bring this case to court due to the impediment of Austria’s banking secrecy laws – where important baking records were hidden. The IRS is lucky that they were able to compile enough evidence to pull a case together. This case just goes to show the importance of implementing automatic exchange of tax information agreements; had an automatic exchange of tax information agreement been in place, the IRS could have brought the case much sooner. Or better: perhaps Misters Krane, Greenstein, and Wilk would have refrained from evading taxes in the first place.