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April 30, 2020

Israel-based Bank Hapoalim, together with its Swiss and other subsidiaries, will pay nearly $875 million and plead guilty to charges that it conspired with U.S. taxpayers and others to conceal $7.6 billion in thousands of Swiss and Israeli bank accounts from the Internal Revenue Service and other U.S. government entities, including New York State.  As part of its plea, the bank admitted that it assisted U.S. customers in setting up secret accounts, sheltering assets and income, and evading taxes.  The total payment by bank entities consists of $216.8 million in restitution to the IRS, $160.3 million in forfeiture, federal penalties of $239.8 million, $37.4 million in civil monetary penalties to the Federal Reserve System, and $220 million in penalties to the New York State Department of Financial Services.   As part of a deferred prosecution agreement, the bank will cooperate with ongoing investigations and disclose information regarding U.S.-related accounts. The bank simultaneously entered into a separate settlement agreement regarding money laundering with respect to the FIFA bribery investigation. DOJ; USAO SDNY; NY.

April 29, 2020

Ecotrust Forest Management and its non-profit affiliate, Ecotrust, will pay $4.4 million to resolve claims under the Oregon False Claims Act that they fraudulently claimed entitlement to New Market Tax Credits, which are meant to provide incentives for economic development in disadvantaged areas of the state, on their financing of two development projects, the Rough & Ready Sawmill in Cave Junction and the purchase of forestland in Desolation Creek.  The companies allegedly overstated their expenses on the projects in order to secure larger tax credits.  OR

April 9, 2020

Auction house Christie’s Inc. and its affiliates will pay up to $16.7 million and enter into a deferred prosecution agreement to resolve claims arising from their failure to register to collect and to collect New York state and local taxes on purchases made in and/or delivered to New York between 2013 and 2017, despite having a legal obligation to do so. DANY

March 11, 2020

The owner and operator of multiple parcel delivery businesses in Florida has been sentenced to 2 years in prison and ordered to pay $9 million in restitution for withholding over $10.8 million in payroll taxes.  Despite his business earning over $100 million in revenue, and despite withholding taxes from hundreds of employees, Ricardo Betancourt failed to actually pay it to the IRS and instead used those funds to finance personal expenses and other business ventures.  DOJ

March 2, 2020

A man in Colorado who was part of a tax fraud scheme involving renewable fuel credits has been sentenced to nearly 7 years in prison and ordered to pay $7.2 million in restitution.  Along with co-conspirators, Matthew Taylor created a fake company, Shintan Inc., that they then used to seek out and obtain over $7.2 million in tax credits for renewable fuel that Shintan never actually produced.  The fraud ran from 2010 to 2013 and personally netted Taylor about $4.5 million.  DOJ

February 11, 2020

Property developer Monique Brady of Rhode Island has been sentenced to 8 years in prison and ordered to pay $4.8 million in restitution for defrauding 23 investors of $10.3 million in a Ponzi scheme that ran from 2014 to 2018.  Brady told investors, many of them her own family, friends, and business associates, that her property rehabilitation business, MNB LLC, had secured contracts to perform large scale rehabilitation work on foreclosed properties in Connecticut, Massachusetts, New Hampshire, and Rhode Island.  To entice investors, Brady promised a 50% return on profits and showed forged emails that purported to show the contracts were valid.  In reality, however, the jobs she was hired to do were menial and paid less than $1,000, and she was using investor funds to finance an extravagant lifestyle.  When she became the subject of a federal investigation, she told investors to delete all records of their investments with her company, then met with federal officials to request that they investigate her investors for usury, before attempting to abscond to Vietnam.  DOJ; USAO RI

December 20, 2019

Zurich-based Swiss bank Coutts & Co Ltd. has agreed to pay $27.9 million in an amendment to a 2015 non-prosecution agreement under the Swiss Bank Program between the bank and the U.S.  In 2015, Coutts reported that it held and managed 1,337 U.S. related accounts, with assets under management exceeding $2 billion, and paid a penalty of $78,484,000. In the amendment, Coutts acknowledges that it should have disclosed 311 additional U.S.-related accounts at the time of the signing of the non-prosecution agreement. DOJ

December 10, 2019

HSBC Private Bank (Suisse) SA has entered into a deferred prosecution agreement and agreed to pay $192 million for conspiring with U.S. clients and others to evade taxes over a ten year period.  At the peak of the scheme in 2007, HSBC Switzerland was estimated to hold undeclared assets worth approximately $1.26 billion on behalf of U.S. clients, before it self-disclosed to authorities three years later.  The resulting fine, which took into account the bank’s extensive cooperation with the investigation, represents about $61 million in restitution to the IRS, $72 million in civil forfeiture to the DOJ, and $59 million in penalties.  DOJ

December 3, 2019

The government has reached a settlement agreement with Franchise Group Intermediate L 1 LLC, the national franchisor and owner of Liberty Tax Service, one of the largest tax preparation service providers in the U.S.  The government alleged that Liberty failed to maintain adequate controls over tax returns prepared by its franchisees, and failed to take steps to prevent the filing of potentially false or fraudulent returns.  The proposed judgment bars Liberty from employing certain individuals, including its founder and former CEO John Hewitt, and requires Liberty to implement specific compliance and reporting procedures, including the implementation of an internal whistleblower program.  DOJ

November 8, 2019

Two New York City real estate development companies, Mica Gabe Brooklyn LLC and Brooklyn Warehouse 180 LLC, will pay $3 million to resolve claims that they secured a New York tax break, Section 421-a, by falsely stating that building service employees would be paid prevailing wages when, in fact, employees hired at the buildings were paid less than the wages required by law.  The $3 million settlement consists of $2.5 million in damages under Section 421-a and the New York False Claims Act, and $415,000 in back wages.  The investigation was initiated with the filing of a whistleblower complaint under the NY FCA by local union 32BJ SEIU, which will receive a portion of the damages as a whistleblower reward.  NY
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