U.S. Citizen Pleads Guilty to Tax Evasion Involving Offshore Accounts

U.S. Citizen Pleads Guilty to Tax Evasion Involving Offshore Accounts

U.S. Citizen Pleads Guilty to Tax Evasion

A U.S. citizen residing in the Principality of Monaco entered a guilty plea today for tax evasion.

The individual concealed over $5,130,000 in income derived from real estate and securities investments held in offshore bank accounts, deliberately keeping this information from the Internal Revenue Service (IRS).

The Defendant’s Background

The defendant, Stephen L. Schechter, held a license as a U.S. investment banker and served as a U.K. corporate finance advisor.

Additionally, he was the owner and operator of a U.S.-based financial investment advisory firm.

Creation of Offshore Entity

In 2002, Schechter established an entity called Charles Penn Longview (CPL) in the British Virgin Islands.

Subsequently, in June 2004, he opened a Swiss bank account under CPL’s name at Piguet Galland & Cie SA. Notably, Schechter and his bank relationship manager concealed his U.S. citizenship status in the bank’s documentation.

For nearly a decade, this account generated unreported interest and dividends.

Concealed Real Estate Transaction

In June 2011, Schechter sold a Monaco apartment for around €14,000,000. The proceeds from this sale were deposited into his CPL account at Piguet.

He used these funds to acquire various securities, totaling $8,856,691. The income earned from these securities in the form of interest, dividends, and capital gains went undisclosed to his tax return preparer.

Further Offshore Account Activity

Schechter later shifted his account to UBS Monaco SA, transferring approximately $10.2 million and continuing to earn undisclosed interest and dividends until 2017.

Violation of FBAR Reporting Obligations

Under U.S. law, citizens and permanent residents are obligated to file an annual FinCEN Form 114 (FBAR) if the combined balance of their foreign accounts exceeds $10,000 at any point during the calendar year. Schechter failed to file FBARs for his Piguet or UBS Monaco accounts.

Sentencing and Potential Penalties

Schechter is set to be sentenced on March 1, 2024. He faces a maximum penalty of five years in prison for tax evasion, along with potential supervised release, restitution, and monetary penalties.

The final sentence will be determined by a federal district court judge, considering the U.S. Sentencing Guidelines and other statutory factors.

Announcement and Investigative Agencies

The announcement of the guilty plea was made by Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Matthew M. Graves for the District of Columbia.

The case is currently under investigation by IRS-Criminal Investigation.

Prosecution Team

Senior Litigation Counsel Nanette Davis and Trial Attorney George Meggali of the Justice Department’s Tax Division, along with Assistant U.S. Attorney Leslie Goemaat for the District of Columbia, are responsible for prosecuting the case.

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