A father and son convicted of hiding a $33 million hotel sale from U.S. tax authorities while living a lavish lifestyle were sentenced to 10 years each in prison.
Mauricio Cohen Assor, 78, and Leon Cohen Levy, 46, were sentenced today in federal court in Fort Lauderdale, Florida, where they were convicted Oct. 7 of conspiring to defraud the Internal Revenue Service and filing false tax returns.
Both men, who built hotels under the “Flatotel” brand, told jurors that they were innocent. They sought home detention and faced as long as 11 years in prison.
Prosecutors said the Cohens used offshore companies, friends and family posing as owners, and forged documents to cheat the IRS. They should have declared income for using mansions and cars they said were owned by corporations, prosecutors said.
“This case is important, both nationally and internationally,” prosecutor Mark Daly told the judge. “This will send a message to the wealthy -- they can no longer hide behind the impenetrable wall of Swiss bank secrecy.”
The Cohens lied on the witness stand, suborned perjury by other witnesses and went to great lengths to conceal $33 million received in the 2000 sale of the New York Flatotel, Daly told U.S. District Judge William Zloch. The men put the money in offshore accounts before transferring it to a Swiss account of HSBC Holdings Plc, Europe’s largest bank by market value, Daly said.
Miami Beach Mansions
The men also hid their ownership of a company that invested as much as $45 million, lived in Miami Beach mansions, and drove cars like a Porsche Carrera GT bought for $500,000, Daly said.
Zloch fined each man $100,000, also ordering the father to pay $9.4 million in restitution and the son to pay $7.8 million. He said he would recommend to the U.S. Bureau of Prisons that they serve in the same facility.
The judge said the men perjured themselves during the trial, that the father was the “true owner” of the New York hotel before its sale in 2000, and that the income from the transaction should have been reported to the IRS.
The father, a Spanish citizen, was born in Algiers, spent most of his life in France and retired to Monaco, according to his lawyers. The son was born in Morocco, became a U.S. citizen in 2003 and moved to Monaco in 2008 to live with his parents, defense lawyers said. After leaving prison, the father will be handed over to immigration officials for deportation, Zloch said.
‘A Death Sentence’
“I’m really disappointed in the sentence,” Susan Bozorgi, an attorney for the father, said outside the courtroom. “I think 10 years essentially is a death sentence.”
Michael S. Pasano, an attorney for both men, said they will appeal. “We’re going to fight,” Pasano said.
Neither defendant expressed remorse to the judge.
The father, speaking in French through an interpreter, told the judge at the hearing: “I am 78 years old. I have memory lapses. I always paid my taxes. I have never tried to take a cent from the United States.”
The son said: “I love my country, the United States of America. I could never, never fail to respect its institutions. I respect the findings of this court. I do not understand them.”
Assistant U.S. Attorney Jeffrey Neiman told the judge that 18,000 U.S. taxpayers declared their offshore accounts to the IRS last year to avoid prosecution. The Cohen case should serve as an example for those who don’t come forward, he said.
Leon Cohen was convicted of falsely reporting $45,000 in income for 2005 and $46,101 for 2007. Mauricio Cohen was convicted of falsely reporting income of $10,399 for 2004 and $41,821 for 2007. Jurors cleared Leon Cohen of a charge that he falsely reported income of $45,000 for 2004.
Prosecutors said Mauricio Cohen failed to report $11.9 million in income, including his use of a Rolls Royce and mansion and his earnings from a British Virgin Islands corporation, Whitebury Shipping Time-Sharing Ltd. Leon Cohen failed to report $4.4 million from his use of his mansion, two Ferraris and two Porsches, the government said.
The case is U.S. v. Assor, 10-cr-60159, U.S. District Court, Southern District of Florida (Fort Lauderdale).
To contact the editor responsible for this story: David E. Rovella at email@example.com.