IRS-Criminal Investigation (CI) Presents: Tax Case of the Month

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December Tax Case of the Month

CI selects 2 December Tax Cases of the Month – Swiss bank agrees to pay $122.9 settlement; 5 sentenced for roles in cyber intrusion, tax fraud scheme

IRS Criminal Investigation (CI) typically selects one criminal case adjudicated during the previous month to serve as the Tax Case of the Month. December was an extraordinary month in terms of criminal tax sentencings, and CI leadership couldn’t select just one. The agency selected TWO Tax Cases of the Month, which were investigated by CI’s New York and Tampa Field Offices.

Bank enters into a deferred prosecution agreement for criminal misconduct, agrees to pay more than $122.9 million

Between 2008 and 2014, the Pictet Group, a more than 200-year-old Swiss financial institution, hid over $5.6 billion in 1,637 secret offshore bank accounts for U.S. clients. That’s what ultimately led the Pictet Group’s private bank, Bank Pictet to enter into a deferred prosecution agreement and agree to pay more than $122.9 million to the U.S. Treasury following an investigation by IRS Criminal Investigation (CI).

The CI investigation revealed that the Pictet Group helped U.S. taxpayers evade more than $50.6 million in U.S. taxes by opening and maintaining undeclared accounts on the taxpayers’ behalf in Switzerland and elsewhere. This included holding account-related documents at the bank instead of mailing them to U.S. addresses, forming offshore entities with no business purpose but to hide assets from the IRS, and transferring funds between accounts to disguise the accounts’ true U.S. owners.

Under the deferred prosecution agreement, Banque Pictet accepts responsibility for its criminal misconduct and agrees to refrain from all future criminal conduct, implement remedial measures and fully cooperate with further investigations into hidden bank accounts.

This case was investigated by CI’s New York Field Office.

RICO conspirators sentenced to prison for cyber intrusion, tax fraud

Five individuals received multiyear sentences for their roles in a sophisticated cybercrime and tax fraud scheme that took place from 2015 to 2019. IRS Criminal Investigation’s (CI) probe revealed that these individuals and others formed an enterprise that purchased compromised server credentials on the dark web to access the digital records of CPA and tax preparation firms across the U.S.

Michael Jean Poix, Alain Jean-Louis, Jeff Propht-Francisque, Monika Jenkins and Louis Michel used those server credentials to access personal information of the firms’ clients – all U.S. taxpayers – and filed more than 9,000 false tax returns using the clients’ stolen information. As the RICO conspiracy evolved, members of the enterprise hijacked the IRS-issued identification numbers of CPA and tax preparation firms and used those identification numbers to file scores of false tax returns. They also created and operated fraudulent tax businesses solely to file tax returns linked to stolen identities. The scheme resulted in more than $45 million in false tax refund claims and an actual loss to the IRS in excess of $7 million.

The conspirators received prison sentences ranging from four to more than 10 years prison and were ordered to pay restitution amounts ranging from $130,771 to more than $3.3 million.

This case was investigated by CI’s Tampa Field Office.

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CI is the criminal investigative arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money-laundering, public corruption, healthcare fraud, identity theft and more. CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, obtaining a more than a 90 percent federal conviction rate. The agency has 20 field offices located across the U.S. and 12 attaché posts abroad.