Foreign Bank Enabler Pleads Guilty to FATCA Crime Based on Undercover Operation (9/11/18)

Former CEO of bank based in St Vincent & the Grenadines
pleads guilty to conspiring to defraud the United States by
failing to comply with the Foreign Account Tax Compliance Act (FATCA).
Baron was extradited to the United States from Hungary in July 2018. 

Here’s the bank’s website – https://www.loyalbank.com/

Note: The above reference link was live on September 2018, but it has since been taken down.

Baron is the second
defendant to plead guilty in this case.  On July 26, 2018, Arvinsingh
Canaye, formerly the General Manager of Beaufort Management Services Ltd. in
Mauritius, pleaded guilty to conspiracy to commit money laundering. 

 

First Ever Conviction for
Failing to Comply with Foreign Account Tax Compliance Act (FATCA)

Earlier
today in federal court in Brooklyn, Adrian Baron, the former Chief Business
Officer and former Chief Executive Officer of Loyal Bank Ltd, an off-shore bank
with offices in Budapest, Hungary and Saint Vincent and the Grenadines, pleaded
guilty to conspiring to defraud the United States by failing to comply with the
Foreign Account Tax Compliance Act (FATCA).  Baron was extradited to the
United States from Hungary in July 2018.  The guilty plea was entered
before United States District Judge Kiyo A. Matsumoto.

Richard
P. Donoghue, United States Attorney for the Eastern District of New York;
Richard E. Zuckerman, Principal Deputy Assistant Attorney General of the
Justice Department’s Tax Division; William F. Sweeney, Jr., Assistant
Director-in-Charge, Federal Bureau of Investigation, New York Field Office
(FBI); and James D. Robnett, Special Agent-in-Charge, Internal Revenue Service
Criminal Investigation, New York (IRS-CI), announced the guilty plea.  Mr.
Donoghue thanked the U.S. Securities and Exchange Commission (SEC), both the
New York Regional Office and the Washington, D.C. Office; the City of London
Police; the U.K.’s Financial Conduct Authority and the Hungarian National
Bureau of Investigation for their significant cooperation and assistance during
the investigation.                       

FATCA
is a federal law enacted in 2010 that requires foreign financial institutions
to identify their U.S. customers and report information (FATCA Information)
about financial accounts held by U.S. taxpayers either directly or through a
foreign entity.  FATCA’s primary aim is to prevent U.S. taxpayers from
using foreign accounts to facilitate the commission of federal tax
offenses.               

According
to court documents, in June 2017, an undercover agent met with Baron and
explained that he was a U.S. citizen involved in stock manipulation schemes and
was interested in opening multiple corporate bank accounts at Loyal Bank.
The undercover agent informed Baron that he did not want to appear on any of
the account opening documents for his bank accounts at Loyal Bank, even though
he would be the true owner of the accounts.  Baron responded that Loyal
Bank could open such accounts and provide debit cards linked to them.

In July
2017, the undercover agent again met with Baron and described how his stock
manipulation scheme operated, including the need to circumvent the IRS’s
reporting requirements under FATCA.  During the meeting, Baron stated that
Loyal Bank would not submit a FATCA declaration to regulators unless the
paperwork indicated “obvious” U.S. involvement.  Subsequently, in July and
August 2017, Loyal Bank opened multiple bank accounts for the undercover
agent.  At no time did Baron or Loyal Bank request or collect FATCA
Information from the undercover agent. 

Baron’s
guilty plea represents the first-ever conviction for failing to comply with
FATCA.  When sentenced, Baron faces a maximum of five years in prison.

Baron
is the second defendant to plead guilty in this case.  On July 26, 2018,
Arvinsingh Canaye, formerly the General Manager of Beaufort Management Services
Ltd. in Mauritius, pleaded guilty to conspiracy to commit money
laundering.

The case is being handled by the Office’s Business and Securities Fraud
Section.  Assistant United States Attorneys Jacquelyn M. Kasulis, Michael
T. Keilty and David Gopstein are in charge of the prosecution.  The
Criminal Division’s Office of International Affairs provided significant assistance
in this matter.

The
Defendant
:

ADRIAN
BARON

Age: 63

Residence: Budapest, Hungary

E.D.N.Y. Docket No.
18-CR-102 (S-1) (KAM)

https://www.justice.gov/usao-edny/pr/former-executive-loyal-bank-ltd-pleads-guilty-conspiring-defraud-united-states-failing

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