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Jersey/Swiss Financial Services Firm Admits to Conspiring with U.S. Taxpayers to Hide Assets and Income in Offshore Accounts

Strachans SA in Liquidation pleaded guilty yesterday to conspiring with U.S. taxpayers and others to hide income and assets in offshore entities and bank accounts from the IRS, and was sentenced in accordance with the guilty plea, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division, U.S. Attorney Nicola T. Hanna, and Chief James Lee of the Internal Revenue Service, Criminal Investigation (IRS-CI).

According to documents filed in Los Angeles federal court, Strachans was an independent firm providing administration to offshore structures for clients residing in a range of countries, including citizens and residents of the United States (U.S.-based clients).  This included the formation of trusts and offshore companies, administration, bookkeeping, and accounting.  Strachans additionally, however, helped U.S.-based clients hide assets from the IRS and evade taxes through the following:

  • Managing undeclared assets for U.S.-based clients that were held by nominee sham entities belonging to the U.S.-based clients.
  • Facilitating frequent cash collections by U.S.-based clients knowing that they had no intention of declaring the funds to the IRS.
  • Providing mechanisms for U.S.-based clients to access their undeclared offshore funds in a secret manner, including fake loans, fake consultancy agreements, and dummy invoicing.
  • For a limited number of U.S.-based clients, who sought an extraordinary level of confidentiality, holding funds in the personal accounts of Strachans’ shareholders to conceal the true beneficial ownership of funds from the IRS.

Strachans accepted responsibility for its conduct by pleading guilty, stipulating to the accuracy of an extensive Statements of Facts, and paying a fine of $500,000.  Yesterday’s guilty plea is the direct result of Strachans’ voluntary disclosure of its criminal conduct in May 2014, and its full and ongoing cooperation with the Department of Justice in connection with its criminal investigations.  Strachans conducted an internal review in order to identify and collect data and information regarding its U.S.-taxpayer accounts.  Strachans reported its findings to the department, and provided documentation supporting its findings.  Strachans also assisted the department in preparing treaty requests for information regarding undeclared account holders.

Principal Deputy Assistant Attorney General Zuckerman, U.S. Attorney Hanna, and Chief Lee commended special agents of IRS-Criminal Investigation, who investigated this case, and Senior Litigation Counsel Nanette Davis and Mark Daly of the Tax Division, and Assistant U.S. Attorney Robert Conte of the U.S. Attorney’s Office for the Central District of California, who prosecuted this case.