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West Central Tribune – A federal magistrate judge ordered the release on bail Wednesday of an Illinois hedge fund manager who allegedly helped Minnesota businessman Tom Petters orchestrate what prosecutors call a $3.5 billion Ponzi scheme.
Prosecutors tried to persuade U.S. Magistrate Judge Jeffrey Keyes that Gregory Bell should be held without bail because he has no significant ties to Minnesota and has millions of dollars in offshore accounts.
They said he also may have or be able to get citizenship in Russia, which has no extradition treaty with the U.S. Bell was born in Moscow in 1965, emigrated to the U.S. in 1981 and is a naturalized U.S. citizen.
New York (HedgeCo.Net) – Wealthy Americans who have been hoarding cash overseas and failing to pay Uncle Sam are getting a break, as the Internal Revenue Service unveils a plan that will greatly reduce their penalties.
The idea comes a month after UBS was charged with helping thousands of American clients hide over $15 billion in secret Swiss bank accounts. The IRS is forcing the bank to disclose the names associated with 52,000 offshore accounts, something that UBS is trying desperately to contest in order to salvage their U.S. clientele base.
Should these individuals come forward prior to this release of names, the IRS is offering a reduced penalty of up to 20 percent for not filing a Report of Foreign Bank and Financial Accounts, also known as an Fbar. However, the clients must be proactive. Should they not come forward and their names eventually be disclosed, they not only face a penalty equal to 50 percent of the balance of each account, but other fines and possible jail time as well.
"This is a chance for people to come clean on their own," IRS Commissioner Doug Shulman explained.
The IRS will still require the individuals to pay any back taxes owed over the last six years as well as any applicable fees. It is estimated that the U.S. loses $100 billion a year in lost tax revenue from offshore activity.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
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New York (HedgeCo.Net) – Senate Finance Committee Chairman Max Baucus has introduced a new bill aimed at halting offshore tax evasion by U.S. companies.
The new bill is in response to Senator Levin’s “Stop Tax Haven Abuse Act,” which also seeks to crack down on offshore jurisdictions and impose tighter restrictions for hedge funds.
The bill will entail several facets, mainly the requirement to report transfers of capital to offshore locations. Any financial institution that directly or indirectly transfers a minimum of $10,000 to an offshore institution must give a detailed report to the U.S. Treasury with the customer’s name, both the onshore and offshore bank associated with the transaction, the amount, along with the account number and type of account. Right now, this information is required to be filed with the Internal Revenue Service, in something known as an FBAR filing.
Any institution who fails to report these transfers or any person who does not include this information with their tax returns would face fines and penalties. The draft bill may have more burdensome reporting requirements and compliance issues for hedge fund managers that do business offshore, but it differs greatly from the “Stop Tax Haven Abuse Act” introduced on March 2 by Senator Levin (D-MI), which would have harsher consequences and stricter requirements for hedge funds.
Stating that offshore tax havens “are engaged in economic warfare against the United States, and honest, hardworking Americans,” the bill essentially seeks to increase the disclosure of offshore accounts, holdings, transactions and entities while increasing the strength and jurisdiction of the U.S. Treasury. Penalties of up to $1 million per violation are expected to be enforced for failure to report to the SEC.
Foreign corporations that are managed and controlled in the United States will be treated as a domestic corporation and will therefore be responsible for paying U.S. taxes. It is estimated that 80 percent of the country’s largest companies have subsidiaries in tax havens. Levin also seeks to close the tax loophole associated with offshore dividends.
Hedge funds will be required to establish anti-money laundering programs as well as use due diligence to evaluate investors supplying offshore funds. The bill also creates a tighter cohesion between the Treasury and the U.S. Securities and Exchange Commission.
The Levin Bill seeks to end the estimated $100 billion in lost tax revenue each year from offshore tax abuse.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds! Be sure to check out our sister sites. www.hedgefundlounge.com, www.hedgefundtools.com, and www.hedgefundemployment.com
New York (HedgeCo.Net) – A federal judge has set a July 13 hearing for UBS, in which they may be forced to disclose names associated with 52,000 secret Swiss bank accounts holding more than $14.8 billion in assets. UBS continues to assert that by providing these names, they are compromising overseas privacy laws as well as the reputation of the bank.
”Such violations would expose these employees to substantial prison terms, as well as fines, penalties and other sanctions,” UBS said in a court filing last week. “There is simply no reason to have, nor equity in having, such an expedited process here.”
UBS is feeling the heat from a surge of international pressure to crack down on secret tax havens sought by the wealthy. Estimating the U.S. loses $100 billion a year from offshore tax abuse, President Obama is at the forefront of the campaign to get tough on tax evasion.
While his Stop Tax Haven Abuse Act was aimed at secret financial centers in the Caribbean, Switzerland has long been regarded as a popular place to stash assets without the watchful eye of Uncle Sam to worry about. Switzerland does not believe that tax evasion is a crime.
UBS has already agreed to pay the U.S. $780 million in damages, with $200 million of that going to settle charges brought on by the Securities and Exchange Commission. They have also agreed to exit the U.S. cross-border banking business and close the existing offshore accounts of their American clients.
Offshore banking has also been cast in a bad light thanks to the recent Antigua-based scandal masterminded by Texas financier Robert Allen Stanford. Stanford’s companies, including Stanford International Bank, are estimated to make up about 10% of the country’s economy with billions in deposits coming from all over the world.
In 1999, the U.S. blacklisted Antigua, accusing the country of lax regulation and subpar anti-money laundering laws. The sanctions were lifted in 2001. Still, deposits in the region continued to soar, and the country insists that their regulatory system is strong. Antigua is currently conducting their own investigation in the Stanford matters.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds! Be sure to check out our sister sites. www.hedgefundlounge.com, www.hedgefundtools.com, and www.hedgefundemployment.com
