Todd Kozel, the founder and chief executive officer of Gulf Keystone Petroleum Ltd. (GKP), said he may have to pay a $6 million fine to U.S. tax authorities because he didn’t declare overseas accounts and trusts.
The penalty came to light when Kozel’s attorneys listed it among his debts in his Florida divorce case. Kozel applied for immunity from prosecution under the Internal Revenue Service’s amnesty program over assets including Swiss bank accounts, his wife Ashley Kozel’s lawyer said this week.
In an interview after a hearing in Sarasota, Florida, Kozel said that while he applied for amnesty, he didn’t owe taxes and only failed to file the proper forms declaring the accounts. “This was a mistake on my part for not checking a box on tax returns for money that I did claim,” he said.
Kozel, who has overseen Gulf Keystone’s rise from a penny stock to the most-valuable firm on London’s Alternative Investment Market (AIM100), is facing separate lawsuits in the U.K., Pennsylvania and Florida disputing how much of the oil company he owns.
Gulf Keystone, based in Bermuda, plans to join the FTSE 250 Index next year. The company’s shares have risen more than 1,000 percent since it announced it found as much as 10 billion barrels of oil in northern Iraq’s Shaikan field.
At the divorce hearing, Kozel’s attorney Mark Luttier said the fine, which hasn’t been paid in full, represented about 25 percent of the highest total Kozel held in offshore accounts. His wife’s attorney, Jeffrey Fisher, told the Florida judge he was concerned about the validity of Kozel’s tax disclosure.
“There is a lot of misinformation in that voluntary disclosure file,” he said.
The hearing in Florida was adjourned when the Kozels announced they had reached a tentative settlement.
The IRS has collected $2.7 billion under a partial amnesty program that offers reduced penalties to U.S. citizens who voluntarily disclose overseas assets, the agency said in September.
Kozel’s holdings in Gulf Keystone are “opaquely structured and incompletely disclosed,” according to court papers filed by Excalibur Ventures LLC in its London lawsuit against the company.
While Kozel is publicly listed as owning about 1.6 percent of Gulf Keystone, lawyers for his wife and Excalibur have identified links with offshore trusts and affiliated companies which own more shares.
Excalibur, which is suing Gulf Keystone for 30 percent of its Kurdish oil assets, says Kozel is a beneficiary of Gokana Trust, an investment vehicle which is the company’s eighth biggest shareholder.
Kozel denies he is a beneficiary of Gokana and said he has complied with market rules. He was awarded salary, cash and shares worth a total of $9.98 million as chief executive officer and chairman Gulf Keystone in 2010, according to the company’s annual report.
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