(The following press release from the U.S. Justice Department was received
by e-mail and was reformatted. The sender verified the statement.)
FOR IMMEDIATE RELEASE
FRIDAY, MARCH 21, 2014
TTY (866) 544-5309
FORMER PRESIDENT OF RUSSIAN STEEL PRODUCER’S US SUBSIDIARY INDICTED FOR HIDING
ASSETS IN SECRET SWISS BANK ACCOUNTS
WASHINGTON – Victor Lipukhin, formerly a resident of St. Charles,
Ill., was indicted yesterday by a federal grand jury in Kansas City, Mo., for
attempting to interfere with the administration of the internal revenue laws
and filing false tax returns, the Justice Department and Internal Revenue
Service (IRS) announced today. The charges relate to Lipukhin hiding millions
of dollars in several Swiss bank accounts held at UBS AG.
According to the indictment, Lipukhin formerly served as president of Severstal
Inc. (USA), a subsidiary of AO Severstal, the largest steel producer in Russia.
He lived in St. Charles from at least 2001 through mid-2007.
Lipukhin, a Russian citizen and former lawful permanent U.S. resident, kept
between approximately $4,000,000 and $7,500,000 in assets in two bank accounts
with UBS in Switzerland from at least 2002 through 2007. In 2002, he and
another individual opened a UBS bank account in the name of Old Orchard, a sham
Bahamian entity. The account was initially funded with over $47,000,000
transferred into the account from a previously maintained UBS account in the
Bahamas. In 2003, the other individual left the account, leaving Lipukhin as
the sole owner and signatory. Lipukhin also maintained another account at UBS
in Switzerland in the name of Lone Star, another sham Bahamian entity. He
directed virtually all transactions in the accounts, typically through a
Bahamian national who served as the nominee director of the Old Orchard and
Lone Star entities to help conceal Lipukhin’s ownership and control. However,
he failed to report his ownership of these accounts and failed to report any
income earned in these accounts on his tax returns.
According to the indictment, in order to further conceal his ownership of the
undisclosed UBS accounts, Lipukhin utilized fictitious mortgages through an
entity called Dapaul Management, controlled by a Canadian attorney, to conceal
his purchase of real estate in the United States with funds from the UBS
accounts. This includes his purchase of a historic building at 18 N. Fourth
St, in St. Charles, Ill., for $900,000 in the name of Charlestal LLC, a
domestic entity controlled by Lipukhin. He also transferred funds from his UBS
accounts to the Canadian attorney for ultimate transfer to a domestic
Charlestal bank account in order to conceal the source of the funds, then used
the funds in the Charlestal account to pay for various personal expenses and to
withdraw cash for personal use. Finally, Lipukhin impeded the administration
of Internal Revenue laws by attempting to prevent an automobile dealer from
filing a Form 8300 – which is required for certain cash transactions over
$10,000 – with the IRS in order to report Lipukhin’s cash payment to purchase
An indictment merely alleges that a crime has been committed, and a defendant
is presumed innocent until proven guilty beyond a reasonable doubt. If
convicted, Lipukhin faces a potential maximum sentence of three years
imprisonment on each count.
U.S. citizens and permanent residents are required to report income from any
source on their tax returns, regardless of whether the source of the income is
inside or outside the United States. Further, U.S. taxpayers who have an
interest in, or signature or other authority over, a financial account in a
foreign country with assets in excess of $10,000 are also required to disclose
the existence of the account on Schedule B, Part III of an individual income
tax return. They must also disclose the existence of the account by filing a
Report of Foreign Bank and Financial Accounts with the U.S. Treasury.
Assistant Attorney General Kathleen Keneally of the Tax Division commended the
agents from IRS –Criminal Investigation who investigated the case and Trial
Attorney Timothy J. Stockwell of the Tax Division, who is prosecuting the case.
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