Tuesday, May 20, 2008
"As part of a widening probe, the U.S. has charged a former UBS AG banker and a Lichtenstein consultant with helping clients avoid taxes by opening secret bank accounts, destroying documents, using Swiss credit cards and filing false tax returns. One client was billionaire California real-estate developer Igor Olenicoff. Mr. Olenicoff set up a web of secret bank accounts in Switzerland and Lichtenstein to avoid taxes on $200 million in assets, a person familar with the U.S. case said. Mr. Olenicoff has been cooperating with investigators in the wake of his criminal guilty plea to a criminal count of filing a false 2002 U.S. tax return. He was ordered to pay $52 million. ... The Justice Department alleges that a central component of the scheme was an effort to get around a 2001 agreement between UBS and U.S. authorities that called for UBS to identify clients who received U.S. taxable income. ... The indictment alleges the scheme with Mr. Olenicoff dates to the fall of 2001 and lasted at least through 2005: The first step was setting up accounts in Swiss and Lichtenstein banks that concealed Mr. Olenicoff's control of assets with taxable U.S. income. ... According to court records from Mr. Olenicoff's December guilty plea, he controlled financial accounts through a series of firms in the United Kingdom, Switzerland, the Bahamas, and Lichtenstein", WSJ, 14 May 2008.
What's going on here? It seems Olenicoff could have been charged with tax evasion, 26 USC 7201. Compare Olenicoff's sentence with Snipes, my 4 May 2008 post. See Doug Berman's (DB) post at http://sentencing.typepad.com/, 4 April 2008 which indicates Olenicoff will get one year of probation and a $3,500 fine. DB writes, "I think what irks me about this story is the idea that a defendant apparently worth $1.6 billion is going to face a fine of a few thousand dollars. Especially if he is to avoid all prison time, how about a fine say, .1% of his worth. Even letting this fellow keep 99.9% of his fortune could still produce a more fitting fine of $1.6 million". I think Olenicoff might have been charged under 18 USC 225, continuing financial crimes enterprise, or 18 USC 1344, bank fraud. Again, what's going on here? The DOJ is a joke. Jesse Jackson, where are you now that the US needs you. As you have said, "no justice no peace". The DOJ seems not to dispense justice, it dispenses injustice.