The Justice Department has filed a lawsuit against a couple who it alleges run a fraud scheme offering asset protection overseas.
The suit was filed in U.S. District Court in Southern Florida and claims a married couple hid customers’ assets through transactions involving fraudulent foreign trusts, sham foreign corporations and bogus trustees. This created an illusion the businesses were based overseas, when in fact they continued to be owned and operated in the U.S.
It also says the defendants falsely told customers that these transactions made their income and assets exempt from U.S. income tax.
Between 2000 and 2005, the suit further alleges, approximately $28 million was channeled through the scheme, and the U.S. Treasury losses are estimated at $4.3 million.
"The Justice Department and Internal Revenue Service are working vigorously to stop tax fraud schemes and detect those who use them," says John A. DiCicco, acting assistant attorney general for the Justice Department’s Tax Division.
Since President Obama took office, the authorities have intensified their efforts to restrain the practice of offshore asset protection.
They gained additional momentum after politicians gathered at the G20 summit in London in April vowed to crack down on tax havens by introducing cross-border regulation.