Using Nominees to hide a Bank Account? Judgment is for $544,731



Read this to understand Form 8938 and FinCen 114 (FBAR) - 

Read this for a background on willfulness -

Now you're ready for this case.  

In United States v. Lanz, 2019 U.S. Dist. LEXIS 222922 (D. N.J. 2019), CL, the district court entered default judgment against the defendant, Lanz, in an FBAR willful penalty collection suit. The judgment is for "$544,731.73 for the penalties assessed against him under 31 U.S.C. § 5321(a)(5), accrued interest on such penalties, late payment penalties, and further statutory additions thereon as allowed by law from August 19, 2015, to the date of payment."



The key excerpts are:

Plaintiff further alleges that Plaintiff failed to
(i) report the income generated in the Account on his federal income tax returns; 
(ii) [*7] file an FBAR as required for 2006, 2007, and 2008; and 
(iii) report having an interest in a foreign bank account on Schedule B of his income tax returns for at least 2006 and 2008. (Id. ¶¶ 13-15). 
Based on these allegations, the Court finds that Plaintiff has sufficiently stated a cause of action for failure to comply with the reporting requirements of 31 U.S.C. § 5314.


Plaintiff alleges several facts suggesting that Defendant acted willfully: 
(i) Defendant took steps to hide his ownership of the Account by telling UBS AG to hold all correspondence relating to the Account (Compl. ¶ 9); 
(ii) Defendant falsely told the IRS twice that he did not own a foreign bank account, and signed an affidavit stating that he did not have a foreign bank account during 2008 (id. ¶ 17); and 
(iii) Defendant eventually transferred the Account that he held in his name to another bank and [*8] put the Account in the name of another person (id. ¶¶ 10-11). 
These actions suggest that Defendant acted willfully in failing to report his ownership and interest in the Account. See United States v. Brandt, No. 17-80671, 2018 U.S. Dist. LEXIS 226286, 2018 WL 1121466, at *4 (S.D. Fla. Jan. 24, 2018) (finding a willful reporting violation under similar circumstances).

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