Prison for Accountants’ Offshore Tax Fraud
LOS ANGELES (CN) – Two tax preparers convicted of running an offshore tax-fraud scheme were given federal prison sentences on Monday, the Justice Department said.
David Kalai and his son Nadav, both principals of United Revenue Service, were convicted of one count of conspiracy to defraud the Internal Revenue Service in December 2014, and two counts each of willfully failing to file foreign bank accounting reports with the government.
The men advised and assisted wealthy clients to conceal millions in income and assets in offshore bank accounts, namely secret accounts in Israeli banks. They also kept a secret account of their own in Bank Leumi in Luxembourg in the name of a foreign sham corporation, federal prosecutors said.
After creating sham corporations in Belize and elsewhere, the Kalais recommended clients transfer funds to the sham corporations’ accounts, transferred the money and prepared their tax returns to record the funds as a false investment loss or business expense, prosecutors said.
Three of the Kalais’ clients have already to tax felonies for their participation in the scheme.
David Kalai will serve three years in federal prison, followed by three years of home confinement, and will pay a $286,000 fine.
Nadav Kalai will spend 50 months in prison, three years on supervised probation and pay a $10,000 fine.