U.S. prosecutors moved to seize $12.2 million they say was transferred to New York from a secret Swiss account set up by a lawyer who helped Americans hide assets from the Internal Revenue Service.
In a forfeiture action filed today in Manhattan federal court, the government demanded the money of “Client 1” and the client’s father, who prosecutors said used a “mail and wire scheme to defraud the IRS of taxes due.” The accounts were held at “Bank A” in Zurich and “Bank B” in Switzerland, according to the civil complaint, which doesn’t name the institutions or client.
The government said the accounts were set up by Swiss attorney Edgar Paltzer, who pleaded guilty in New York on Aug. 16, admitting he committed tax fraud for more than a decade. Paltzer is cooperating with prosecutors amid a U.S. crackdown on offshore tax evasion that has targeted Swiss banks, bankers, lawyers and financial advisers.
In 2003, “Paltzer began to assist the Father and Client 1 in ensuring that their accounts at Swiss Bank B remained hidden from U.S. authorities,” according to the complaint by U.S. Attorney Preet Bharara.
Paltzer created sham entities in the British Virgin Islands, Liechtenstein and Panama to hide the true owners of the accounts and visited the client and father in Staten Island, New York, in 2006, according to the complaint. The client and Paltzer also had dinner in Manhattan.
In late 2008, as the U.S. intensified its crackdown, Bank B told the client and father that their undeclared accounts had to be closed, according to the complaint. Paltzer moved $12 million to Bank A. In February 2014, the money “was wired from Swiss Bank A to an IRS seized account” in Manhattan, according to the complaint.
The case is U.S. v. Approximately $12,000,000 in United States Currency, 14-CV-2460, U.S. District Court, Southern District of New York (Manhattan).