Credit Suisse Client Gets 7 Months for Hiding $200 Million

  • Dan Horsky pleaded guilty to hiding assets and income from IRS
  • Horsky said to help U.S. investigation of Swiss bank

A former client of Credit Suisse Group AG who pleaded guilty to hiding $200 million from U.S. tax authorities was sentenced to seven months in prison after a judge granted him leniency for cooperating with prosecutors, a Justice Department official said.

Dan Horsky, a retired business professor from Rochester, New York, was also sentenced to a year of probation, 50 hours of community service and fined $250,000 on Friday in federal court in Alexandria, Virginia. Horksy, 71, pleaded guilty Nov. 4 to using secret Swiss bank accounts to hide assets and income from the Internal Revenue Service and New York tax authorities. 

“Horsky went to great lengths to hide assets overseas in order to avoid paying his share of taxes to the IRS,” U.S. Attorney Dana Boente said in a statement.

Prosecutors urged a judge to send him to prison for 20 months, far below federal sentencing guidelines of 57 to 71 months. Judges aren’t bound by the guidelines. Horsky’s lawyers said he deserved probation because he cooperated with prosecutors and will pay at least $124 million in penalties.

“We greatly respect the court’s careful and thoughtful evaluation of this case,” said Mark Matthews and Seth Kossman, his attorneys. “Mr. Horsky will continue to cooperate with the government fully as needed.”

Prosecutors are examining how Credit Suisse hid Horsky’s accounts from the Justice Department even as a subsidiary pleaded guilty in May 2014 to helping thousands of Americans evade taxes, according to people familiar with the matter who weren’t authorized to discuss it publicly. 

U.S. District Judge T.S. Ellis III’s sentence is in line with a trend of rulings against prosecutors seeking harsher terms for tax evasion. Dozens of wealthy U.S. tax defendants who used offshore accounts have avoided prison or received terms far below those recommended by advisory guidelines. Judges have consistently ruled against Justice Department prosecutors seeking harsher terms.

Horsky’s scheme ended in 2015, when IRS agents knocked on his door. Prosecutors said he evaded more then $18 million in income and gift taxes by filing fraudulent returns. They said he failed to file Reports of Foreign Bank and Financial Accounts, or FBARs, through 2011, and fraudulent ones in 2012 and 2013.

“Mr. Horsky’s criminal actions to evade his federal income tax obligations were particularly flagrant and unacceptable,” said Richard Weber, chief of IRS Criminal Investigations.

The case is U.S. v. Horsky, 16-cr-224, U.S. District Court, Eastern District of Virginia (Alexandria).

— With assistance by Erik Larson

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