The information supplied by foreign financial investigators indicated the divorcing husband had hidden marital assets offshore. Evidence gathered during the divorce also suggested that the husband might have committed a tax fraud in hiding the marital assets.
To try to detect any additional assets hidden by the husband, I contacted Brian. Brian was a former high-ranking official at the Treasury Department’s Financial Crimes Enforcement Network and he had earlier been an IRS Special Agent. Brian was going to lead our interview of the husband’s business associate, who we were about to meet for the very first time. Right before the interview, Brian identified some of the federal statutes relevant to many tax fraud investigations:
- 26 U.S.C. § 6050I, large cash reporting requirements for trades & businesses (including attorneys).
- 26 U.S.C. § 7201, most commonly applied tax evasion statute (however requires proof of a tax liability).
- 26 U.S.C. § 7203, failure to file a timely tax return.
- 26 U.S.C. § 7206 (1), perjury on a return / false statements, (unlike 26 U.S.C. § 7201, proof of a tax liability is unnecessary).
- 26 U.S.C. § 7206 (2), perjury on a return / false statements, but primarily used against tax return preparers such as accountants and attorneys.
- 18 U.S.C. § 371, conspiracy to commit offense / defraud the United States.
- 18 U.S.C. § 1001, false statements made to the federal government (can apply to any material verbal or written statement, even if unsworn).
- 18 U.S.C. § 1956, money laundering.
- 18 U.S.C. § 1957, money laundering involving property derived from specified unlawful activity.
- 18 U.S.C. § 1961, Racketeer Influenced & Corrupt Organizations (“RICO”).
- 31 U.S.C. § 5324, structuring bank deposits.
I hoped that Brian and I would learn what the business associate knew about the divorcing husband’s hidden money and suspected tax fraud. As Brian started the interview, he told the business associate: “Once a tax fraud investigation starts rolling along, nobody knows where it may end up”.
Copyright 2008-2015 Fred L. Abrams
Edited February 8, 2014