IPC Management Services LLC, a Belize-based investment firm, and its founder were accused of a $500 million scheme to launder money and hide investments as part of a U.S. crackdown on tax evasion.
Robert Bandfield, a U.S. citizen, was charged in an indictment unsealed today in Brooklyn federal court with conspiring to commit securities fraud, tax fraud and money laundering. Five other individuals and six companies are accused of taking part in the plan that involved as many as 100 U.S. clients, according to prosecutors.
The defendants -Robert Bandfield, Andrew Godfrey, Kelvin Leach (Titan), Rohn Knowles, Brian De Wit and Cem Can- “set up sham companies with figureheads at the helm in an attempt to deceive U.S. law enforcement and regulators and bragged about their scheme to their clients,” Brooklyn U.S. Attorney Loretta Lynch said in a statement today.
Unlike in many other countries, the U.S. taxes citizens on their worldwide income regardless of where they actually live. U.S. officials have been cracking down on possible tax sheltering in foreign accounts. Overseas payments have also become subject to new disclosure requirements.
Starting in January 2009, the group began “masquerading as financial professionals,” concocting inter-related schemes in which they used offshore companies to conceal clients’ ownership interests in U.S. companies, prosecutors said. The group also manipulated stock prices in those companies and helped the clients evade U.S. tax reporting requirements as well as launder proceeds, prosecutors said.
Bandfield was arrested today in Miami. The other defendants have residences in Belize, prosecutors said.
Titan International Securities Inc., Legacy Global Markets S.A. and Unicorn International Securities LLC were among the companies also charged.
The U.S. Securities and Exchange Commission filed a related lawsuit today.
The case is U.S. V. Bandfield et al, 14-cr-00476, U.S. District Court, Eastern District of New York (Brooklyn).
Tax evasion is using illegal means to avoid paying taxes. Typically, tax evasion schemes involve an individual or corporation misrepresenting their income to the Internal Revenue Service. Misrepresentation may take the form either of underreporting income, inflating deductions, or hiding money and its interest altogether in offshore accounts.
In the United States, tax evasion constitutes a crime that may give rise to substantial monetary penalties, imprisonment, or both. Section 7201 of the Internal Revenue Codereads, “Any person who willfully attempts in any manner to evade or defeat any tax imposed by this title or the payment thereof shall, in addition to other penalties provided by law, be guilty of a felony and, upon conviction thereof, shall be fined not more than $100,000 ($500,000 in the case of a corporation), or imprisoned not more than 5 years, or both, together with the costs of prosecution.”
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