• Home
  • News
    • People moves
    • Africa
    • Asia
    • Australia
    • Canada
    • Caribbean
    • Domicile
    • Europe
    • Latin America
    • North America
    • Middle East
    • US
    • US
    • UK
  • Products
    • Funds
    • Pensions
    • Platforms
    • Insurance
    • Investments
    • Private Banking
    • Citizenship
    • Taxation
  • Fintech
  • Regulation
  • ESG
  • Expats
  • In Depth
  • Special Reports
  • Directory
  • Video
  • Advertise with us
  • Directory
  • Events
  • European Fund Selector
  • Newsletters
  • Follow us
    • Twitter
    • LinkedIn
    • Newsletters
  • Advertise with us
  • Directory
  • Events
    • Upcoming events
      event logo
      Sustainable Investment Festival 2021

      The Sustainable Investment Festival will run online from 22-25 June and will include thought-provoking presentations from renowned keynote speakers, innovative breakout events and sessions specifically tailored to meet the information needs of fund selectors, financial advisers, pension consultants, trustees and scheme managers.

      • Date: 22 Jun 2021
      • Online, Online
      View all events
  • European Fund Selector
International Investment
International Investment

Sponsored by

Sharing Alpha
  • Home
  • News
  • Products
  • Fintech
  • Regulation
  • ESG
  • Expats
  • In Depth
  • Special Reports
  • Video
  • Taxation

US professor hit with US$100m FBAR penalty for hiding US$200m in assets

US professor hit with US$100m FBAR penalty for hiding US$200m in assets
  • Helen Burggraf
  • 09 November 2016
  • Tweet  
  • Facebook  
  • LinkedIn  
  • Send to  

In what could be the largest Foreign Bank Account Report penalty thus far levied for tax evasion, an emeritus professor of business administration from Rochester, New York has been hit with a US$100m FBAR penalty by the US Internal Revenue Service.

The US$100m was part of a plea agreement with the professor, a 71-year-old named Dan Horsky, the US Justice Department said in a statement, which penalty, it noted, was separate from any restitution that the court may eventually also order.

Related articles

  • American hit with 'record' $14m fine, 6 month prison sentence for failing to file FBARs
  • American expat tax deadline tomorrow…
  • Former CONCACAF and Caymans football official pleads guilty to money laundering
  • Court defeat for US DoJ in Swiss banker trial

Horsky pleaded guilty on Friday to hiding US$200m in assets by using offshore accounts, using “false expatriation documents” and “conspiring with others” in his efforts to keep his wealth out of the US tax net, the Justice Department statement said.

It said Horsky – a citizen of the US, the UK and Israel – was employed for more than 30 years as a professor of business administration. He began his foray into offshore investing in 1995 by taking stakes “in numerous start-up businesses through financial accounts at various offshore banks, including one bank in Zurich, Switzerland”.

The Justice Department statement didn’t name the Zurich bank, but a Bloomberg report said it was Credit Suisse, citing as its source three people familiar with the case. Credit Suisse didn’t immediately reply to a request for comment.

According to the Justice Department, “Horsky created ‘Horsky Holdings’, a nominee entity, to hold some of the investments and he used the Horsky Holdings account, and later, other accounts at the Zurich-based bank, to conceal his financial transactions and financial accounts from the IRS and the US Treasury Department”.

US Justice Department Principal Deputy Assistant Attorney General Caroline Ciraolo said Horsky’s  guilty plea “[proved], once again, that taxpayers will pay a heavy price when they choose to secrete funds in foreign bank accounts and evade tax and reporting obligations”.

Horksy is due to be sentenced on February 10, and faces a maximum prison sentence of five years, as well as a period of supervised release and monetary penalties.

The obligation to file FBARs with the US tax authorities came into force in 1970 with the Bank Secrecy Act, although the law wasn’t often enforced until a few years ago. As many expatriate Americans have discovered to their cost, it is being enforced now, with severe penalties often being handed out.

Failure to file FBARs can result in both civil penalties and possible imprisonment. The statutory civil penalties might be $10,000 per year for a non-willful failure, but a failure to file that is deemed to be “willful” could leave an individual subject to a penalty of US$100,000 or 50% of the balance in the unreported foreign account, whichever was greater, per year, for up to six tax years.

David Treitel, a London-based tax expert and principal of American Tax Returns Ltd, noted that the word in the expat American community is out now about the size of the potential penalties faced by anyone found guilty of willfully failing to file FBARs on time, with the result that “many people are more scared these days of FBAR penalties than tax returns”.

He noted that the size of potential FBAR penalties are a legacy of the last Republican president, George W Bush, and are unlikely to be reduced anytime soon, given the lack of political desire in the US “to be even a tiny bit nice to people perceived as tax cheats”.

Treitel recommends any financial advisers or wealth managers who advise Americans on investments outside of the US to include wording in their client documents “which reminds [these] US citizen clients that they may have tax or reporting requirements back in the United States”.

To read the Justice Department’s statement on its website, click here. 

  • Tweet  
  • Facebook  
  • LinkedIn  
  • Send to  
  • Topics
  • Taxation
  • Europe
  • US
  • IRS
  • Tax Evasion
  • US tax

More on Taxation

Jersey zero-ten tax system at 'sell-by date'

  • Taxation
  • 12 April 2021
Sting in tax tail for British expat voters

  • Taxation
  • 12 April 2021
World Bank among calls for restraint on global pandemic tax

  • Taxation
  • 08 April 2021
Tax
Tax allowances 'only going to get worse' as thresholds decrease by 11%

  • Taxation
  • 22 March 2021
HMRC data show uncertainty causes rise in CGT tax receipts

  • Taxation
  • 19 March 2021
Back to Top

Most read

First digital only bank in UAE set to go live
First digital only bank in UAE set to go live
UK government must 'U-turn' on pension age change
UK government must 'U-turn' on pension age change
Standard Chartered names Singapore heavy hitter for global role
Standard Chartered names Singapore heavy hitter for global role
DeVere UK and Fidelius enter strategic partnership
DeVere UK and Fidelius enter strategic partnership
Bitcoin hits record high on cusp of Coinbase IPO
Bitcoin hits record high on cusp of Coinbase IPO
  • Contact Us
  • Marketing solutions
  • About Incisive Media
  • Terms and conditions
  • Policies
  • Careers
  • Twitter
  • LinkedIn
  • Newsletters

© Incisive Business Media (IP) Limited, Published by Incisive Business Media Limited, New London House, 172 Drury Lane, London WC2B 5QR, registered in England and Wales with company registration numbers 09177174 & 09178013

Digital publisher of the year
Digital publisher of the year 2010, 2013, 2016 & 2017
Loading